Final Regulatory Impact Analysis:
Control of Emissions of Air Pollution
from Highway Heavy-Duty Engines
£% United States
Environmental Protection
^1 Agency
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Final Regulatory Impact Analysis:
Control of Emissions of Air Pollution
from Highway Heavy-Duty Engines
Engine Programs and Compliance Division
Office of Mobile Sources
Office of Air and Radiation
U.S. Environmental Protection Agency
£% United States
Environmental Protection
^1 Agency
EPA-420-R-97-011
September 1997
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Table of Contents
CHAPTER 1: INTRODUCTION 1
I. Overview of the Statement of Principles and Rulemaking 1
II. Summary of the RIA 3
A. Chapter 2—Health and Welfare Concerns 3
B. Chapter 3—Industry Characterization 3
C. Chapter 4—Technological Feasibility 4
D. Chapter 5—Economic Impact 4
E. Chapter 6—Environmental Impact 5
F. Chapter 7—Cost-Effectiveness 6
CHAPTER 2: HEALTH AND WELFARE CONCERNS 7
I. Background 7
A. Ozone 7
B. Particulate Matter 8
II. National NOx and VOC Emission Trends 10
III. Contribution of Heavy-Duty Vehicles to National NOx and VOC Emissions 13
A. National Mobile Source NOx Emission Trends 13
B. National Mobile Source VOC Emission Trends 13
CHAPTER 3: INDUSTRY CHARACTERIZATION 17
I. National Uniformity of Standards 17
II. Engine Manufacturers 18
A. Highway Vehicles Involved 18
B. Sales 18
C. Engine Manufacturer Profiles 20
III. Vehicle Manufacturers 25
A. Heavy-duty Vehicle Use 25
B. Sales ..- 25
C. Equipment Manufacturer Profiles—United States and Worldwide 27
D. Future Truck Sales 30
IV. Engine Rebuilding 32
A. Light Heavy-Duty Diesel Engines and Heavy-Duty Gasoline Engines 32
B. Medium and Heavy Heavy-Duty Diesel Engines 32
C. Rebuilding Industry Characterization 33
CHAPTER 4: TECHNOLOGICAL FEASIBILITY 47
I. Background 47
II. Engine Controls 49
A. Combustion Optimization 49
B. Electronic Control 51
C. Charge Air Compression 51
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D. Charge Air Cooling 52
E. Advanced Fuel Injection 53
F. Exhaust Gas Recirculation 54
G. Technology Combinations 56
H. Crankcase Emission Control 61
III. Aftertreatment 62
A. Particulate Matter Control 62
B. Oxides of Nitrogen Control 66
IV. Developmental Technology 68
A. Water Injection 68
B. Ceramics :. 68
C. Hybrid Vehicle Designs 69
D. Plasma Catalysts 69
V. Fuels 69
A. Diesel Fuel Quality 69
B. Alternative Fuels 70
C. Alternative Power Sources 73
VI. Conclusion 74
CHAPTER 5: ECONOMIC IMPACT 85
I. Lead Time and R&D 85
II. Methodology 86
III. Technologies for Meeting the 2004 Standards 86
A. Primary Technologies 90
B. Operating Costs 93
C. Secondary Technologies 94
IV. Summary of Costs 96
V. Aggregate Costs to Society 100
CHAPTER 6: ENVIRONMENTAL IMPACT 107
I. Total Nationwide Emissions 107
A. Current Inventories 107
B. NOx Emission Projections and Impacts 108
C. NMHC Emission Projections and Impacts Ill
II. Per-Vehicle Emission Impacts 117
A. Per-Vehicle Emission Factors 118
B. Per-Vehicle Average Mileage Accumulation Rates 119
III. Environmental Impacts of Emission Reductions 123
A. Ozone Impacts 123
B. Particulate Impacts 124
C. Other Impacts of Emission Reductions 125
IV. Summary 126
CHAPTER 7: COST-EFFECTIVENESS 129
I. Cost-Effectiveness of the NOx and NMHC Emission Standards 130
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II. Cost-Effectiveness Sensitivity Analyses 134
A. Sensitivity to Fuel Economy Penalty 135
B. Sensitivity to Increased Maintenance Costs 136
C. Sensitivity to the Cost of Projected Compliance Technologies 136
III. Comparison of Cost-Effectiveness with Other NOx Control Strategies 138
.APPENDIX
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Chapter 1: Introduction
CHAPTER 1: INTRODUCTION
This chapter presents a summary of the Regulatory Impact Analysis (RIA) that follows. It
begins with a brief description of the Statement of Principles, which established the framework for
the rule, as well as the provisions of the final rulemaking itself. The Environmental Protection
Agency (EPA) finalized several provisions that were not specifically described in the Statement of
Principles. This is followed by a brief summary of each of the chapters of the RIA including health
and welfare benefits, industry characterization, technological feasibility, economic impact,
environmental impact and cost-effectiveness.
I. Overview of the Statement of Principles and Rulemaking
Over the last 20 years, emissions from highway heavy-duty engines have been reduced as a
result of changing emission standards and related requirements. Although previously promulgated
standards for control of emissions of oxides of nitrogen (NOx) and hydrocarbons (HC) are expected
to lead in the short term to reductions in emissions of these ozone precursors, there is concern that
the fleets' emission levels will increase in the future. According to various studies, NOx ievels in
the U.S. are showing a downward trend today, but factors such as the growth in the number of
vehicles and driving activity in the near future will likely result in total NOx emissions that will
exceed current levels. Many states will need reductions in NOx and HC to achieve ozone attainment
in the future and there is concern that some areas considered attainment areas today may go into
nonattainment in the fixture. Moreover, some nonattainment areas expected to reach attainment may
return to nonattainment, thus reversing the positive impact that past regulations will have on people's
health and the environment.
With these reasons in mind EPA, the California Air Resources Board, and highway heavy-duty
engine manufacturers signed the Statement of Principles in 1995 to pursue a large reduction in NOx
emissions from highway heavy-duty engines. This historic accord has given government and
industry the opportunity to agree on common goals with mutually beneficial results. The SOP
included the following new standards which would apply to all highway heavy-duty engines,
including those that use diesel, gasoline, alternative fuels, or fuel blends:
1) a combined NMHC plus NOx standard of 2.4 g/bhp-hr, or
2) a combined NMHC plus NOx standard of 2.5 g/bhp-hr, with a cap of 0.5 g/bhp-hr on NMHC
emissions.
The Statement of Principles also contained several key provisions in addition to the standards.
Signatories recognized the importance of maintaining emission controls throughout the life of the
engine and agreed to develop appropriate measures to ensure that emission-control improvements
are maintained in use. Signatories agreed to work cooperatively to develop an improved national
averaging, banking, and trading program that would create more incentive for the early introduction
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Final Regulatory Impact Analysis
of technologies and provide manufacturers with flexibility that may be critical in making the
standards feasible in 2004. Furthermore, the Statement of Principles discusses the need to review
in 1999 the technological feasibility of the standards and their appropriateness under the Clean Air
Act (CAA). The document also recognizes the benefits of harmonizing California and federal
emission standards for highway heavy-duty engines. Also, the SOP outlines a plan for developing
technology that reduces NOx emissions to 1.0 g/bhp-hr and PM to 0.05 g/bhp-hr while maintaining
performance, reliability, and efficiency of the engines.
The Notice of Proposed Rulemaking (NPRM) proposed the new standards contemplated in the
SOP for highway heavy-duty engines beginning in 2004. Furthermore, the NPRM proposed a
number of changes to the averaging, banking and trading program (ABT) to ease the transition to
the new standards and provide an incentive for the early introduction of technology. In response to
the general provisions in the Statement of Principles regarding in-use emission controls, EPA
proposed a series of updates to current regulations to further encourage highly durable emission-
control technologies. For the final rule, several of the proposals were modified in response to
comments received by the Agency. The reader is directed to the preamble for the NPRM and or the
Summary and Analysis of Comments for the final rule for a complete description of these proposals.
For the final rule, EPA is finalizing the standard of 2.4/2.5 g/bhp-hr NMHC plus NOx contained
in proposal for diesel-cycle engines. For otto-cycle engines (e.g., gasoline-fueled engines), EPA is
not finalizing any new standards in this rule. Therefore, this RIA does not contain information
regarding the effect of the standards on otto-cycle engines.
The final rule also contains modified ABT provisions for heavy-duty diesel engines, which
increase industry compliance flexibility and respond to the need to promote the early introduction
of new emission control technology, as well as to obtain early emission reductions. EPA is not
finalizing new ABT provisions for otto-cycle engines because no new standards are being adopted
for those engines. In summary, engine manufacturers will be able to generate credits under the new
program beginning with the 1998 model year for use only in 2004 and later model years. The credits
in the modified program will have unlimited life, as opposed to the three year credit life contained
in the current program. Also, engines with certification levels at or belcw a certain cut point are able
to generate undiscounted credits. Credits generated by engine families certified above the specified
cut point are discounted by 10 percent for purposes of banking and trading. The current averaging,
banking, and trading program is being retained for engine using credits before 2004, and for otto-
cycle engines which cannot earn credits in the modified program, as noted above. In 2004, the cut-
point is adjusted to reflect the implementation of the new standard.
EPA finalized several provisions to help ensure in-use durability. First, EPA is increasing the
useful life period for heavy heavy-duty diesel engines to 435,000 miles. This new period represents
a 50 percent increase and is more representative of the durability of current and future heavy heavy-
duty diesel engines. In addition, longer allowable maintenance intervals are being finalized for some
critical emission-control components, including exhaust gas recirculation systems, catalysts, and
other add-on emissions control components. Generally, the maintenance intervals for the
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Chapter 1: introduction
components are set at 100.000 miles for light heavy-duty diesel engines and 150.000 miles for
medium and heavy heavy-duty diesel engines. Warranty regulations were also revised to better
reflect current industry practices.
Other provisions address the period after the manufacturer's responsibility for emission control
ends, including engine rebuilding. One of those provisions requires engine manufacturers to
establish a section in the owners manual for add-on components that includes recommendations for
maintenance and diagnosing malfunction. In adJition, all on-board monitoring used to satisfy the
engine's allowable maintenance must not be designed to turn off after the end of the useful life.
Finally, EPA is establishing provisions to address engine rebuilding which specify what actions are
needed to ensure proper operation of emissions control components and ensure that rebuilding does
not result in loss or emissions control. Removal or disabling of emissions related components,
resulting in a higher emitting vehicle, would be considered tampering. Please refer to the final rule
documents for more detailed information on the requirements, especially the provisions regarding
ABT, durability, allowable maintenance, and rebuilding.
II. Summary of the RIA
A. Chapter 2—Health and Welfare Concerns
Chapter 2 provides an overview of the health and environmental effects associated with ozone
and particulate matter. As part of the legally-required periodic review of the ozone and PM air
quality standards, EPA has recently assessed the impacts of ozone and PM on human health and
welfare, taking into account the most relevant, peer-reviewed scientific information available.
Chapter 2 reviews some of EPA's key concerns at this time, as compiled in the Agency's Criteria
Documents and Staff Papers for ozone and PM. The chapter also provides national NOx and VOC
emissions inventories and emissions trends.
B. Chapter 3—Industry Characterization
EPA, California, and the engine manufacturers acknowledged in the Statement of Principles the
benefits of harmonizing California and federal emission regulations. Chapter 3 discusses the need
for such harmonization and the problems that manufacturers face when designing and selling
different engines in order to meet different emission standards. The chapter also presents an
overview of the type of vehicles and the major manufacturers that are affected by the rule. Ail diesel
engines used in highway vehicles with a gross vehicle weight rating of 8,500 lbs or greater will be
subject to the new standards and provisions. The eleven manufacturers currently selling heavy-duty
engines in the U.S., nine of which are diesel engine manufacturers directly affected by the new
standards. These engines are used in vehicles that range in from Class 2B through Class 8 heavy-
duty vehicles. Also included are buses and motor homes.
Recent sales trends show that diesel engines are playing an increasingly prominent role in all
heavy-duty vehicle categories, especially Classes 5 through 8. In addition, data indicate that sales
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Final Regulatory Impact Analysis
have increased for Classes 3 and 4 in the last fev, years, while sales of Class 5 engines have
decreased rapidly.
Chapter 3 also an overview of engine rebuilding practices. Heavy-duty engines are often
rebuilt because it is more economical than buying a new engine. These rebuilds extend engine life
far beyond the "useful life". An EPA study found that currently most rebuilt engines exhibit
emissions at or below certification levels for that model year. Virtually all heavy heavy-duty diesel
engines are rebuilt at least once during their lifetime; between 220,000 and 250,000 of these engines
are rebuilt each year. Medium heavy-duty diesel engines, which in some cases are not designed for
rebuilding, are not rebuilt as often; only about 83,000 of these engines, or less than ten percent of
the population, are rebuilt each year. Light heavy-duty diesel engines and heavy-duty gasoline
engines are usually not rebuilt. About 40,000 heavy-duty gasoline engines, close to one percent of
the total population, are rebuilt each year.
C. Chapter 4—Technological Feasibility
To achieve the proposed standards, heavy-duty diesel engine manufacturers will need to
consider a combination of new and existing emission control devices. Chapter 4 presents the
technologies available and discusses their potential for helping to reach the proposed emission levels.
Emission control devices such as exhaust gas recirculation (EGR), advanced fuel injection and
charge air systems can help reduce NOx plus NMHC levels to 2.4 g/bhp-hr in heavy-duty diesel
engines.
Even though engine manufacturers have been successful in the past in meeting more stringent
emission standards, lower levels will present a technological challenge. The difficulty of decreasing
NOx without increasing PM has led manufacturers to explore the possibility of using aftertreatment
devices in combination with other engine technologies. EGR, which is currently used in gasoline
engines, is a potential technology for further emission reductions in the future from diesel engines.
O. Chapter 5—Economic Impact
The costs associated with the development of emission-control devices were estimated first by
considering which emission-control devices would be more likely to help reduce NOx plus NMHC
levels to those proposed for the year 2004. The primary technologies for controlling emissions from
diesel engines are EGR, combustion chamber optimization and fuel system upgrades. The secondary
technologies, or those that are expected to play a minor role in controlling NOx emissions, include
variable-geometry turbochargers, advanced oxidation catalysts, and lean NOx catalysts.
Total costs were estimated from the cost differential that is expected from engines that will
comply with 1998 standards to those that will comply with 2004 standards. Cost calculations were
made separately for the three categories of heavy-duty diesel vehicles and urban buses due to their
differences in cost, durability, expected mileage accumulation and sensitivity to fuel penalty. The
total life-cycle cost per engine included the total manufacturer cost plus the operating costs over the
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Chapter 1: Introduction
life of the engine. The manufacturer cost consisted of the projected emission control devices and
estimated variable costs (components, assembly labor and overhead) and fixed costs (tooling,
research and development, and certification).
Table 1-1 summarizes the estimated increases in the purchase price of heavy-duty engines in
the years 2004, 2006, and 2009. Long-term cost estimates shown in the table reflect a reduction
from initial costs because fixed costs are recovered after five years. In addition, technology and
production learning curves reduce costs as manufacturers gain experience in production. In addition
to the increased purchase price, operating expenses are expected to increase to account for effects
on oil changes and rebuild practices. The estimated net present value of these changes for each
engine is $10, $60, $130, and $125 for light, medium, and heavy heavy-duty vehicles, and urban
buses, respectively.
Table 1-1
Estimated Incremental Impact on
Heavy-Duty Diesel Engine Purchase Price
Service Class
Model Year
2004
2006
2009
Light heavy-duty
$258
$224
$109
Medium heavy-duty
$397
$355
$136
Heavy heavy-duty
$467
$411
$180
Urban Bus
$406
$361
$143
E. Chapter 6—Environmental Impact
Estimates show that emissions from heavy-duty diesel vehicles account for about 10 percent
of the total 1990 inventory of NOx emissions and 1.3 percent of total volatile organic carbon
emissions. Trends demonstrate that present NOx standards will help reduce emissions over the next
several years, but the increase in the number of vehicles and driving activity will result in total NOx
emission levels that are expected to surpass current levels by the year 2020. NMHC projections
show that the proposed standard would have a small effect in the NMHC inventory because only
about ten percent of heavy-duty diesel engines sold in 1994 emit HC at levels of 0.5 g/bhp-hr or
more.
Additional data presented in Chapter 6 show that the proposed standards would result in NOx
reductions that exceed one million tons by the year 2020, or nearly a five percent reduction of the
total NOx inventory. In addition, it is estimated that NMHC would be reduced by 16,400 tons per
year in 2020, or less than one percent of the total inventory in the U.S. It is projected that, as a result
of the proposed standards, about half of the emission benefits will occur in attainment areas, one
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Final Regulatory Impact Analysis
quarter will occur in marginal and moderate nonattainment areas, and one quarter in serious, severe,
and extreme nonattainment areas.
Other environmental impacts discussed include the reduction in the concentration of secondary
nitrate particles as a result of lower NOx standards. It is estimated that the equivalent particulate
emission reductions could be as high as 44,000 tons if there is a 2.0 g/bhp-hr NOx standard highway
heavy-duty diesel engines. These NOx, and consequently particulate, reductions would also result
in less acid deposition and less nitrogen present in estuaries.
F. Chapter 7—Cost-Effectiveness
Chapter 7 presents an analysis of the per-vehicle cost-effectiveness of the standards for new
heavy-duty diesel engines. The analysis relies on cost and emissions information described in
Chapters 5 and 6, estimating cost-effectiveness in terms of dollars per ton of total emission
reductions. Cost-effectiveness is a tool used for comparing the cost and benefits of a given measure
relative to the costs and benefits of other control programs. In this case, the comparison is for urban
ozone nonattainment area control programs. The cost-effectiveness analysis for the new engine
standards was performed for all diesel heavy-duty vehicles, with a separate calculation for three
individual categories of heavy-duty diesel vehicles (light, medium, and heavy). A fleet
cost-effectiveness analysis is also presented covering 30 model years after the new engine standards
would take effect. Three sensitivity analyses look at the effect of fuel economy penalty, increased
maintenance costs, and increased technology costs on cost-effectiveness.
The cost-effectiveness of the new engine standards is analyzed by two cost-effectiveness
scenarios. The first scenario presents the nationwide cost-effectiveness, in which the life-cycle costs
are divided by the lifetime NOx plus NMHC emission benefits. The second scenario presents a
regional ozone strategy cost-effectiveness, in which life-cycle costs are divided by the discounted
lifetime NOx plus NMHC emission benefits after adjusting for the fraction of emissions that occur
in the regions expected to impact ozone levels in ozone nonattainment areas. Based on the two
cost-effectiveness scenarios, the range in the cost-effectiveness results for 2009 and later model year
heavy-duty diesel vehicles is $100 to $200 per ton.
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Chapter 2: H®nllfilh Dirndl W©lfeFeC©ne®ms
As part of the legally-required periodic review of the ozone and PM air quality standards, EPA
has recently assessed the impacts of ozone and PM on human health and welfare, taking into account
the most relevant, peer-reviewed scientific information available. The paragraphs below review
some of EPA's key concerns at this time, as compiled in the Agency's Criteria Documents and Staff
Papers for ozone and PM. The Criteria Documents are prepared by the Office of Research and
Development consist of EPA's latest summaries of scientific and technical information on each
pollutant. The Staff Papers on ozone and PM are prepared by the Office of Air Quality Planning and
Standards and summarize the policy-relevant key findings regarding health and welfare effects.
A. Oz@im@
Over the past few decades, many researchers have investigated the health effects associated with
both short-term (one- to three-hour) and prolonged acute (six- to eight-hour) exposures to ozone.
In particular, in the past decade, numerous controlled-exposure studies of moderately-exercising
human subjects have been conducted which collectively allow a quantification of the relationships
between prolonged acute ozone exposure and the response of people's respiratory systems under a
variety of environmental conditions. To this experimental work has been added field and
epidemiological studies which provide further evidence of associations between short-term and
prolonged acute ozone exposures and health effects ranging from respiratory symptoms and lung
function decrements to increased hospital admissions for respiratory causes. In addition to these
health effects, daily mortality studies have suggested a possible association between ambient ozone
levels and an increased risk of premature death.
Most of the recent controlled-exposure ozone studies have shown that respiratory effects similar
to those found in the short-term exposure studies occur when human subjects are exposed to ozone
concentrations as low as 0.08 ppm while engaging in intermittent, moderate exercise for six to eight
hours. These effects occur even though ozone concentrations and levels of exertion are lower than
in the earlier short-term exposure studies and appear to build up over time, peaking in the six- to
eight-hour time frame. Other effects, such as the presence of biochemical indicators of pulmonary
inflammation and increased susceptibility to infection, have also been reported for prolonged
exposures and, in some cases, for short-term exposures. Although the biological effects reported in
laboratory animal studies can be extrapolated to human health effects only with great uncertainty,
a large body of toxicological evidence exists which suggests that repeated exposures to ozone causes
pulmonary inflammation similar to that found in humans and over periods of months to years can
accelerate aging of the lungs and cause structural damage to the lungs.
In addition to the effects on human health, ozone is known to adversely affect the environment
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Final Regulatory Impact Analysis
in many ways. These effects include reduced yield fo; commodity crops, for fruits and vegetables,
and commercial forests; ecosystem and vegetation effects in such areas as National Parks (Class I
areas); damage to urban grass, flowers, shrubs, and trees; reduced yield in tree seedlings and non-
commercial forest?- increased susceptibility of plants to pests; materials damage; and visibility.
Nitrogen oxides (NOx), a key precursor to ozone, also results in nitrogen deposition into sensitive
nitrogen-saturated coastal estuaries and ecosystems, causing increased growth of algae and other
plants.
B. Particulate Matter
Particulate matter (PM) represents a broad class of chemically and physically diverse substances
that exist as discrete particles (liquid droplets or solids) over a wide range of sizes. Human-
generated sources of particles include a variety of stationary and mobile sources. Particles may be
emitted directly to the atmosphere or may be formed by transformations of gaseous emissions such
as sulfur dioxide or nitrogen oxides. The major chemical and physical properties of PM vary greatly
with time, region, meteorology, and source category, thus complicating the assessment of health and
welfare effects as related to various indicators of particulate pollution. At elevated concentrations,
particulate matter can adversely affect human health, visibility, and materials. Components of
particulate matter (e.g., sulfuric or nitric acid) contribute to acid deposition.
Key EPA findings can be summarized as follows:
1. Health risks posed by inhaled particles are affected both by the penetration and deposition of
particles in the various regions of the respiratory tract, and by he biological responses to these
deposited materials.
2. The risks of adverse effects associated with deposition of ambient particles in the thorax
(tracheobronchial and alveolar regions of the respiratory tract) are markedly greater than for
deposition in the extrathoracic (head) region. Maximum particle penetration to the thoracic
regions occurs during oronasal or mouth breathing.
3. The key health effects categories associated with PM include premature death; aggravation of
respiratory and cardiovascular disease, as indicated by increased hospital admissions and
emergency room visits, school absences, work loss days, and restricted activity days; changes
in lung function and increased respiratory symptoms; changes to lung tissues and structure; and
altered respiratory defense mechanisms. Most of these effects have been consistently associated
with ambient PM concentrations, which have been used as a measure of population exposure,
in a large number of community epidemiological studies. Additional information and insights
on these effects are provided by studies of animal toxicology and controlled human exposures
to various constituents of PM conducted at higher than ambient concentrations. Although
mechanisms by which particles cause effects are not well known, there is general agreement that
the cardiorespiratory system is the major target of PM effects.
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Chapter 2: Health and Welfare Concerns
4. Based on a qualitative assessment of the epidemiological evidence of effects associated with
PM for populations that appear to be at greatest risk with respect to particular health endpoints,
the EPA has concluded the following with respect to sensitive populations:
a. Individuals with respiratory disease (e.g., chronic obstructive pulmonary disease, acute
bronchitis) and cardiovascular disease (e.g., ischemic heart disease) are at greater risk of
premature mortality and hospitalization due to exposure to ambient PM.
b. Individuals with infectious respiratory disease (e.g., pneumonia) are at greater risk of
premature mortality and morbidity (e.g., hospitalization, aggravation of respiratory
symptoms) due to exposure to ambient PM. Also, exposure to PM may increase
individuals' susceptibility to respiratory infections.
c. Elderly individuals are also at greater risk of premature mortality and hospitalization for
cardiopulmonary problems due to exposure to ambient PM.
d. Children are at greater risk of increased respiratory symptoms and decreased lung function
due to exposure to ambient PM.
e. Asthmatic individuals are at risk of exacerbation of symptoms associated with asthma, and
increased need for medical attention, due to exposure to PM.
5. There are fundamental physical and chemical differences between fine and coarse fraction
particles and it is reasonable to expect that differences may exist between the two subclasses
of PMt0 in both the nature of potential effects and the relative concentrations required to
produce such effects. The specific components of PM that could be of concern to health include
components typically within the fine fraction (e.g., acid aerosols, sulfates, nitrates, transition
metals, diesel particles, and ultra fine particles), and other components typically within the
coarse fraction (e.g., silica and resuspended dust). While components of both fractions can
produce health effects, in general, the fine fraction appears to contain more of the reactive
substances potentially linked to the kinds of effects observed in the epidemiological studies.
The fine fraction also contains the largest number of particles and a much larger aggregate
surface area than the coarse fraction which enables the fine fraction to have a substantially
greater potential for absorption and deposition in the thoracic region, as well as for dissolution
or absorption of pollutant gases.
With respect to welfare or secondary effects, fine particles have been clearly associated with
the impairment of visibility over urban areas and large multi-state regions. Fine particles, or major
constituents thereof, also are implicated in materials damage, soiling and acid deposition. Coarse
fraction particles contribute to soiling and materials damage.
Particulate pollution is a problem affecting localities, both urban and non-urban, in all regions
of the United States. Manmade emissions that contribute to airborne particulate matter result
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Final Regulatory Impact Analysis
principally from stationary point sources (fuel combustion and industrial processes), industrial
process fugitive particulate emission sources, non-industrial fugitive sources (roadway dust from
paved and unpaved roads, wind erosion from cropland, etc.) and transportation sources. In addition
to manmade emissions, consideration must also be given to natural emissions including dust, sea
spray, volcanic emissions, biogenic emanation (e.g., pollen from plants), and emissions from wild
fires when assessing particulate pollution and devising control strategies.
II. National NOx and VOC Emission Trends
Figure 2-1 shows projected total NOx emissions over the time period 1990 to 2020, including
a breakdown between stationary and mobile source components over the same period.1 Figure 2-2
presents similar data for VOC emissions for the period 1990 to 2010. As the figures show, a similar
pattern is projected for both of these ozone precursor emissions. Initially, the projections indicate
that national inventories will decrease over the next few years as a result of continued
implementation of finalized stationary and mobile source NOx control programs called for in the
Clean Air Act. After the year 2000, however, when the implementation of these Clean Air Act
programs is largely completed and the pressure of growth continues, these downward trends are
expected to reverse, resulting in rising national VOC and NOx emissions.
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Fig. 2-1. National NOx Emissions Inventory
Projected from 1990 to 2020.
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¦ Mobile Sources o Stationary Source a Total
|Source:Contract No. EPA-68-30035 (E.H. Pechan)|
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[Source: National Air Pollutant Emission Trends, 1990-I993 (EPA 1994]j
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Chapter 2: Health and Welfare Concerns
III. Contribution of Heavy-Duty Vehicles to National NOx and VOC
Emissions
Highway heavy-duty vehicles represent about 12 percent of nationwide NOx emissions and are
an important source of VOC and PM emissions throughout the country. This section reviews EPA's
current estimates of the contribution of heavy-duty vehicles to the nation's major air pollution
problems now and into the future. The projections that follow incorporate the emission reductions
from all national emission control programs for stationary and mobile sources for which final
regulations had been promulgated at the time of the proposal.
A. National Mobile Source NOx Emission Trends
Figure 2-3 shows the total mobile source NOx inventory by emission source (light-duty
vehicles, heavy-duty vehicles, and nonroad engines) projected over the next 25 years.2 For light- and
heavy-duty vehicles the figure shows a decline in emissions over the next decade as current
programs phase in. The figure also shows, however, that this current downward trend is projected
to end, resulting in a return to current levels in the absence of further controls. Nonroad emissions
are projected to rise throughout the period.
B. National Mobile Source VOC Emission Trends
Figure 2-4 shows the total national mobile source VOC inventory by emission source.3 As with
the NOx emission projections in Figure 2-5, this figure shows that light-duty vehicle emissions can
be expected to decline for some years, but then begin rising in the 2005 time frame. VOC emissions
from heavy-duty vehicles and nonroad sources are projected to rise gradually throughout this period.
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Fig. 2-3. National Mobile Source NOx Inventory
Projected from 1990 to 2020
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Highway Heavy Duty o Highway Light Duty ± Nonroad
|Source:Contract No. EPA-68-30035 (E.H.
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Fig. 2-4. National Mobile Source VOC Inventory
Projected from 1990 to 2010
8
= 4
o
O
0
1990
O
I
1995
2000
Year
~
.. L .
2005
<$>
2010
Light-Duty Highway o Heavy-Duty Highway a Nonroad
-------
Final Regulatory Impact Analysis
Chapter 2 References
1 .See Chapter 6 for a discussion of the modeling assumptions used in generating emission
inventories.
2. U.S. Environmental Protection Agency Contract No. EPA68-300-35. E. H. Pechan.
3.U.S. Environmental Protection Agency. (1994) National Air Pollutant Emissions Trends,
1900-1993. Research Triangle Park, NC: Office of Air Quality Planning and Standards. EPA
Report No. EPA-454/R-94-027.
16
-------
Chapter 3: Industry Characterization
CHAPTER 3: INDUSTRY CHARACTERIZATION
In any evaluation of the impact of emission standards it is essential to have a thorough
understanding of the affected industries. This assessment is important to better understand the
industry's ability to comply with the new standards, both monetarily and physically. The purpose
of this chapter is to characterize the affected industries: who the engine and equipment manufacturers
are, what they produce, their degree of vertical integration, and their size and financial standing.
Although gasoline -fueled engines are not affected by the new standards, information is provided
on those engines and engine manufacturers to provide a complete picture of the heavy-duty engine
industry.
I. National Uniformity of Standards
The Clean Air Act allows California to set its own heavy-duty engine emission standards and
provides the opportunity for other states to adopt these standards by adopting the California program.
However, truck and engine manufacturers have long called for uniform emission standards
throughout the country.4 The advantage of uniform standards is apparent when one considers a
scenario of varying standards across different states or regions.
Without uniform standards, engine manufacturers would have to develop and produce two or
more different models of the same engine for different areas of the country. This would add expense
in design, manufacturing, and certification of the engines and would increase the complexity of
marketing as manufacturers determine how many engines they must produce for each market. An
alternative for the engine manufacturers would be to produce their engines to meet the most stringent
standard in the country so their engines could be sold anywhere. This approach would simplify the
production and marketing of low-emitting engines, but may increase the price of engines and result
in a competitive disadvantage compared with manufacturers that produce engines designed to meet
the less stringent standards.
Engine manufacturers also face potential problems with nonuniform standards. The same basic
engine model engineered to meet different emission standards may require a different packaging
approach for the vehicle manufacturer. Thus, from a business perspective there are benefits to
uniform national standards if they can be justified from air quality and cost-effectiveness
perspectives. Sales and marketing of these vehicles will be; more complex, since manufacturers will
have to plan how to distribute their engine sales. More importantly, the sale of one type of engine
will be closed to other markets with more stringent standards. Thus, the manufacturers will have to
aAs will be seen later in this chapter while some manufacturers do make both trucks and
engines, usually engine and truck manufacturers are separate entities, one serving as supplier and
the other as customer.
17
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Final Regulatory Impact Analysis
keep track of two or more different sales figures. Vehicle marketers in the area with more stringent
standards may be at a disadvantage as users purchase higher emitting vehicles in other states or move
operations to areas where standards are less stringent.
II. Engine Manufacturers
A. Highway Vehicles Involved
This rulemaking would apply to diesel vehicles with a gross vehicle weight rating (GVWR) of
8,500 pounds or greater (Classes 2B through 8). Table 3-1 shows a breakdown of the vehicle classes
and their GVWR. This rulemaking also includes buses and motor homes with a GVWR in excess
of 8,500 lbs. For heavy-duty diesel vehicles, EPA categorizes Classes 2B through 5 as light heavy-
duty, Classes 6 and 7 as medium heavy-duty, and Class 8 as heavy heavy-duty. For heavy-duty
gasoline engines, Classes 2B and 3 are light heavy-duty and Class 4 and bigger are heavy heavy-
duty.
Table 3-1
Vehicle Class and GVWR Breakdown
Vehicle Class
2B
3
4
5
6
7
8
GVWR (lbs.)
8.501 • 10.000
10.001 -14.000
14,001 ¦ 16.000
16,001- 19.500
19.501-26,000
26.001- 33,000
33,000+
B. Sales
According to the Power Systems Research (PSR) Database, which compiles a list of the sales
data for all engines sold in the United States, there were 11 manufacturers of engines for vehicles
in the heavy-duty vehicle categories listed above doing business in the United States in 1994.b
Table 3-2 contains a list of those manufacturers, the number of engines sold in the United States
(both diesel and gasoline), and the vehicle categories involved. Six other foreign manufacturers
certified heavy-duty diesel engines for sale in the U.S. in 1994. These included Hino, Isuzu,
Mitsubishi, Nissan, Perkins, and Renault.
As Table 3-2 shows, the six major manufacturers in these categories: Caterpillar, Cummins,
Detroit Diesel, Ford, General Motors, and Navistar account for over 80 percent of the total engines
sold in the United States. Only General Motors makes both gasoline and diesel engines. Chrysler
and Ford use diesel engines produced by other manufacturers in their vehicles. Only one
manufacturer, Cummins, produces engines in all three diesel engine categoiies. A few
manufacturers certified alternative-fueled engines.
Tower Systems Research is a company that tracks the sales and populations of vehicle
and engines in the highway as well as nonroad areas.
18
-------
Chapter 3: Industry Characterization
Table 3-2
1994 Engine Manufacturer Sales
Engine
Manufacturer
Vehicle Class Categories
:b*
3 &4"
5
6
7
8
Bus
Motor
Home
Caterpillar
4,977'
13,059
57,043
2.192
194
Chrysler
50.000
3,596
24
Cummins
43.000
3.765
656
1.143
32.499
79.588
10.593
8,812
Detroit Diesel
51.371
4,527
282
Ford
198.000
3.237
154
6.732
554
40
10
General Motors
234.000
16.699
3.071
6.283
1.922
20.630
Hercules
10
Mack
25.815
Mercedes Benz
20
144
89
Navistar
116.000
17.462
199
1,974
37,029
6.470
18.120
Volvo
671
2.466
TOTAL
641.000
44,759
855
11,339
96.417
223.396
37.404
29,952
'Class 2B engine sales are based on EPA estimates of manufacturer sales.
"Classes 3 and 4 are presented together because PSR combined them in its database.
SOURCE: PSR Database, 1995.
Figures 3-1 through 3-8 illustrate sales trends for the years 1980 through 1994 (except for motor
homes, which are 1985 through 1999) for gasoline and diesel engines separately.1 In studying these
figures, some important trends become apparent. First, the general trend of heavy-duty engine sales
is upward. There are periods of downward trends that correspond to downward turns in the
economy, but nevertheless, the overall trend has been toward increased sales.
Second, as shown in Figure 3-8, while the trend of duty engine sales over the last four years is
upward, this is dominated by an increase in diesel engine sales. The gasoline engine sales have
actually been decreasing over the years (although the level of gasoline engine sales has leveled off
in the past few years), thus it is evident that dieselization of the heavy-duty vehicle market has been
taking place. In other words, an even greater percentage of heavy-duty vehicles is diesel-powered
and, if present trends continue, diesel engines will take on an increasingly important role in the
future.
A final point that can be derived from the graphs is that there is an apparent migration across
truck classes. Figures 3-2 and 3-3 show a dramatic decrease in sales for truck Classes 5 and 6. Since
the sales for all other classes (both above and below Classes 5 and 6) are showing increases, it is not
possible to determine whether this is a net upward (toward higher GVWR) or a downward (toward
lower GVWR) migration. However, the most reasonable assumption is that the migration is
19
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Final Regulatory Impact Analysis
occurring in both directions to some degree. Possibly with the Class 5 vehicles migrating to the
Class 4 level and the Class 6 vehicles migrating up to class 7.
To form a better picture of the types of engines that are presently being sold for various vehicle
classes, it is important to understand these engines' power and torque requirements. Table 3-3
provides the range of peak horsepower and torque of the engines in each vehicle class for the 1994
model year. Except for Class 5, which has extremely small sales in comparison with other classes,
there is a general increase in the average horsepower and torque as the GVWR increases. Buses and
motor homes, as one would expect, vary considerably in size and thus utilize a broad range of engine
power and torque.
Table 3-3
Rated Horsepower and Torque Ranges for Gasoline and Diesel Heavy-duty Engines
Class 2B
Classes 3&4
Class 5
Class 6
Class 7
Class 8
Buses
Motor
Homes
Peak HP Range
135-210
100 - 300
160-190 '
160 - 300
160- 300
190- 500
121-450
160-450
Peak Torque
Range (ft-lbs.)
2J3-400
184-644
542 - 658
514- 1288
514- 1288
499-2509
245 • 1966
407- 1966
SOURCE: PSR Database, 1995.
C. Engine Manufacturer Profiles
This section develops a profile of the individual engine manufacturers that may be affected by
the new emission standards for heavy-duty engines. Gasoline-fueled engine manufacturers are also
included. The discussion includes the financial standing of the organization, its size, and other
industries in which it is involved. This information was derived from the 1995 InfoTrac Database.
A later section discusses the situation for vehicle manufacturers, some of which also manufacture
engines. Table 3-4 summarizes manufacturers' product offerings for the different fuels and engine
sizes.
20
-------
Chapter 3: Industry Characterization
Table 3-4
1994 Heavy-Duty Engine Categories
for Each Manufacturer (G=Gasoline. D=Diesel)
Manufacturer
Light
Medium
Heaw
Caterpillar
D
D
Chrysler
G
Cummins
D
D
D
Detroit Diesel
D
Ford
G
General Motors
G, D
D
G
Mack
D
Mercedes Benz
D
Navistar
D
D
Renault
D
Volvo
D
D
1. Caterpillar, inc.
Caterpillar produces a large number of engines that are used in highway applications, primarily
truck Classes 6 through 8. Caterpillar is also well known as one of the larger manufacturers of
nonroad equipment and engines for equipment used in construction, forestry, and farming to name
a few. This vertical integration in the nonroad market is not paralleled on the highway side;
Caterpillar sells its highway engines to other companies that manufacture and sell the trucks and
buses in which their engines are used.
Caterpillar employs about 54,000 people worldwide, with its main office located in Peoria,
Illinois and with several plants in the United States, Brazil, Australia, France, Switzerland, Mexico,
Belgium, Japan, Hong Kong, Singapore, Italy, and Indonesia. Caterpillar's Engine Division employs
about 8,000 people. Caterpillar sells products under three different trade names: Cat and Caterpillar,
used for engines, earthmoving equipment, construction and material handling machinery and lift
trucks; and Solar, which is used for their line of turbine engines.
Caterpillar is involved in several businesses other than its engine and nonroad equipment
manufacturing, as evidenced by its diverse list of subsidiaries, including Caterpillar Financial
Services Corporation, Defense Products, Service Technology Group, Caterpillar Logistics Services,
21
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Final Regulatory Impact Analysis
Inc., Caterpillar Paving Products, Inc., Caterpillar Venture Capital, Inc., Caterpillar World Trading
Corporation. Caterpillar Insurance Services, Inc.. Solar Turbines, Inc., and Caterpillar Industrial
Products, Inc.
Caterpillar, Inc., the parent company, had total revenues in fiscal year 1994 of $14.3 billion,
while the Engine Division had a total revenue of $1.3 billion, or about nine percent of the parent
company's.
2. Chrysler Corporation
Chrysler Corporation is a well known manufacturer of passenger cars and trucks. Chrysler also
produces gasoline engines for Class 2B through Class 4 highway vehicles (between 8,500 and
16,000 lbs GVWR). Chrysler produces the vehicles in which these engines are used, such as their
heavier Dodge Ram pickups, wagons and vans with a GVWR above 8,500 lbs.
Chrysler is also involved in several other business areas. Its subsidiaries manufacture adhesives,
automotive parts, boats, chemicals, outboard motors, automotive testers, tractors, and military
vehicles. Chrysler is also involved in automotive rental and financial services. As of 1994, Chrysler
had approximately 121,000 employees with a total sales revenue of $52.2 billion. Because Chrysler
does not report separately the heavy-duty vehicle or engine manufacturing information, data about
engine revenue was not available.
3. Cummins Engine Company
Cummins Engine Company makes engines for all the vehicle classes affected by the new
emission standards. The information for the engine populations produced by Cummins includes
those engines manufactured by Consolidated Diesel Company, a private subsidiary of Cummins.
Cummins' headquarters is located in Columbus, Indiana and Consolidated Diesel is located in
Whitakers, North Carolina.
Cummins manufactures primarily diesel engines and the associated parts, but also produces
some of their own other systems such as turbochargers, electronic control systems, and alternators
that may be marketed to its competitors. Consolidated Diesel manufactures diesel engines for sale
under the Cummins label. They also produce nonroad engines of Cummins design for Case, a well
known nonroad equipment manufacturer.
In 1994 Cummins Engine company employed approximately 25,600 people and had revenues
of $4.7 billion, primarily from the sale of engines and parts. Consolidated Diesel, during that same
time period, employed 1,500 people and had revenues of $520 million.
22
-------
Chapter 3: Industry Characterization
4. Detroit Diesel Corporation
Detroit Diesel Corporation is a major player in manufacturing engines for Class 8 trucks and
buses. Manufacturing these heavy duty engines and engine parts appears to be the main thrust of
Detroit Diesel's business. Its headquarters is located in Detroit, Michigan.
Detroit Diesel is owned by Penske Corporation, which is involved in many business areas,
including car and truck rentals. As of 1994, Detroit Diesel employed approximately 5,400 people
and had annual sales revenue of $1.7 billion. Detroit Diesel is the parent company of Detroit Diesel
Remanufacturing West located in Salt Lake City, Utah. As the name would imply, this company
remanufactures of diesel engines. In 1994, it employed 218 people and had revenues of $31 million.
Detroit Diesel in 1995 bought VMI, a manufacturer of diesel engines for passenger cars.
5. Ford Motor Company
Ford Motor Company, best known for its production of passenger cars and light trucks, also
produces both engines and vehicles for several models of heavy-duty gasoline trucks. Ford buys
engines from manufacturers of diesel engine manufacturers for its line of heavy-duty diesel trucks.
Ford is involved in a number of other businesses including, motor vehicle parts and accessories
manufacturing and financial services. Ford owns at least a portion of several other businesses
throughout the world, including other automobile manufacturers. It maintains production at many
assembly and manufacturing plants in the United States and throughout the world. In 1994, Ford
employed 337,778 people, and had a total sales revenue of $128.4 billion. No information was
available to show how much of this revenue was from its heavy-duty engine manufacturing
operations.
6. General Motors Corporation
General Motors Corporation (GM), with its headquarters in Detroit, Michigan, is a major player
in heavy-duty engine manufacturing, producing a large market share of the engines in Class 2B
through Class 6 truck categories. GM also produced almost 70 percent of the engines for motor
homes in 1994. It is the only manufacturer that produces both gasoline and diesel heavy-duty
engines. GM also manufactures the chassis for many of the heavy-duty trucks and motor homes for
which they manufacture engines. GM is involved several other business areas as well, most
importantly as a major manufacturer of passenger cars and trucks and replacement parts for their
products. GM is involved in motor vehicle financing.and also owns a data and electronics firm. GM
owns part or all of many companies throughout the world, some of which are also involved in the
automobile manufacturing industry. In 1994, General Motors employed 692,800 people throughout
the world and had sales revenues of about $124 billion.
23
-------
Final Regulatory Impact Analysis
7. Hercules Engine Company
Hercules engine company plays a very small role in the heavy-duty engine manufacturing
industry, having produced only 10 bus engines in 1594. Most Hercules engines are for nonroad
purposes and are used predominantly in generator sets and forklifts.
Hercules is a privately held company with headquarters in Canton, Ohio. In 1994 it employed
300 people and produced $55.0 million in sales revenue.
8. Mack Trucks, Inc.
Mack Trucks, Inc. is located in Allentown, Pennsylvania. It produces and sells truck chassis
under the Mack label. These chassis are predominantly of the Class 8 type, but they also make truck
chassis in the Class 6 and 7 weight classes. The Powertrain Division, located in Hagerstown,
Maryland, produces engines for Class 8 trucks only.
Mack Truck was recently purchased by Renault, a major European automobile manufacturer.
Mack Trucks employed 5,459 people in 1994 and had sales revenue of $970 million. The
Powertrain Division employed 1,500 people of the total and accounted for $220 million of total
Mack Truck sales.
9. Mercedes Benz of America
Mercedes Benz of America is a subsidiary of Daimler Benz, which is located in Europe. The
heavy-duty engines produced by Mercedes Benz are only a small portion of its market, evidenced
by the fact that Mercedes Benz of North America had a total sales revenue in 1994 of $2.2 billion
while employing 1,400 people. Mercedes Benz is also a producer of passenger cars powered by
diesel and gasoline engines.
10. Navistar International Corporation
Navistar is a large stand-alone company based in Chicago, Illinois. It is a major manufacturer
of light and medium heavy-duty engines, except for those used in motor homes. Navistar is also
involved in the manufacturing of truck and bus bodies. The main company, Navistar International
Corporation, is listed primarily as a builder of truck and bus bodies as well as being involved as a
financial holding company.
Navistar International Transportation, a subsidiary founded in 1987, manufactures motor
vehicles and car bodies. Its division, Navistar International Transportation Corporation, Engine and
Foundry Division, manufactures heavy-duty diesel engines. The overall parent company, Navistar
International Corporation, employed 14,910 people in 1994 and had 1994 sales revenues of
$5.3 billion.
24
-------
Chapter 3: Industry Characterization
11. Volvo GM Heavy Truck Group
The Volvo GM Heavy Truck Group presently produces a very small percentage of the engines
for Classes 7 and 8 engines. While GM owns approximately 13 percent of the company, it is owned
primarily by Volvo, the Swedish automobile manufacturer. The Heavy Truck Group manufactures
Volvo trucks as well as diesel engines. Located in Greensboro, North Carolina the Heavy Truck
Group employs 4,200 people and had sales revenues in 1994 of $1.0 billion, most of which can be
attributed to its vehicle sales and not engine production, since the number of engines produced was
relatively small.
III. Vehicle Manufacturers
A. Heavy-duty Vehicle Use
Heavy-duty vehicles are sold for many different commercial purposes. Table 3-5 lists the
primary products carried by trucks and the approximate number of trucks used for these purposes
by weight class. The table shows that trucks transport a very wide range of commodities.
The trucking industry is divided into two basic carrier categories: local and intercity. Carriers
are considered local if they conduct 50 percent or more of their business in a metropolitan area.
Intercity carriers (otherwise known as line haul or over-the-road) conduct pickup and delivery
between metropolitan areas. The intercity carriers currently account for 29 percent of all intercity
freight in terms of ton-miles, second only to railroad freight transport. These trucks compete with
railways, inland waterways, pipelines and domestic airways for freight transportation. Figure 3-9
shows that trucks have gained an increasing role in the competition for carrying intercity freight.
Thus, as the amount of intercity commerce dependent on trucks increases, the importance of trucks
to the nation's commerce becomes more apparent.
B. Sales
The American Automobile Manufacturers Association (AAMA) provides a listing of trucks sold
by make and GVWR. Table 3-6 shows the sales information for 1993. Note that these numbers do
not entirely match the information on engine sales from Table 3-2 for those manufacturers who make
both engines and truclfbodies. These may have several causes. First, there can be some differences
in apparent engine and vehicle sales attributed to one company if that company makes both engines
and vehicles; this company will not necessarily make all of its engines for its own vehicles, nor will
it use only its engines in its manufactured vehicles. Also, not all engines may be'made for new
vehicles. Some engines are manufactured and sold as replacement engines.
25
-------
Final Regulatory Impact Analysis
Table 3-5
Number of Heavy-Duty Vehicles by Products Carried (Thousands)
| Product]
Class 2*
Class 3 | Class 4 | Class 5
Class 6
Class 7
Class 8
Farm Products
182.6
58.2
30.7
39.6
147.5
77.8
197.7
Live Animal]
155.1
53.1
12.9
16.1
29.8
14.4
35.5
Animal Feed
92.6
14.5
7.7
6.8
17
7.2
28.4
Mining Products
4.1
3.6
NA
0.9
4.6
2.2
24.7
Raw Forest Products
36.7
8
6.7
6.7
11.4
5.9
58.9
Lumber & Wood Prod.
80.7
13.3
8.8
9
20.8
10.2
43.9
Processed Food
130.1
32.4
11.2
16.3
48.9
44.1
182
Textile Mill Products
57.1
11.9
3.1
4.1
7.8
5
18.4
Building Materials
162.8
52.6
31.1
25.6
87.1
49.7
306.7
Household Goods
13.3
3.7
2.6
4.9
11.3
3.8
24.4
Furniture/Hardware
37.2
13.6
3.6
8.5
8.4
3.3
20.2
Paper products
59.1
9.8
2
7.2
10.8
5
52.5
Chemicals
60.4
13.9
6.6
6.1
30.3
11.3
49.8
Petroleum
50.8
10.1
8.5
9.8
40.7
23.7
65
Plastics/Rubber
26.3
4.3
2.1
2.2
4.8
2.6
18.2
Primary Metal Prod.
57.0
8.7
4
4.3
9.8
3.6
49.3
Fabricated Metal Prod.
45.3
1.3
6.2
6.7
14.7
5.8
29.7
Machinery
129.7
24.3
12
8.8
27.8
14.7
67.6
Transportation Equip.
102.2
59.2
21.5
10.6
18.1
9.6
57.7
Glass Products
1.4
0.7
NA
NA
1.8
NA
4.8
Misc. Manufacturing Prod.
58.9
8.1
NA
7
9.3
4.6
27.J
Industrial "waste" water
NA
NA
NA
NA
NA
0.9
5.1
Scrap, Refuse, Garbage
34.5
13.4
I0.J
9.6
18.9
' 13.3
64.2
Mixed Cargoes
66.4
30.2
14.3
15.8
26.6
13.4
107
Cnflsnun's Equip.
548.3
68.5
15.4
16.6
33.8
16.4
13.3
Recyclable]
7.3
3.1
1.8
2.1
7.1
3.9
16.1
Personal Transport
1920.9
84.8
18.5
11.1
14.2
1.2
NA
Passengers
111.5
6.5
NA
NA
NA
0
0 "
Totals
4232.5
611.8
241.8
256.4
663.3
353.6
1568.6
~Includes vehicles from 6,000 to 10,000 lbs. GVWR. The new standards apply to diesel vehicles above 8,500 lbs.
GVWR. These numbers were included for completeness.
SOURCE: 1992 Census of Transportation, United States Truck Inventory and Use Survey, U.S. Department of
Commerce.
26
-------
Chapter 3: Industry Characterization
C. Equipment Manufacturer Profiles—United States and Worldwide
Truck manufacturers vary greatly in size and structure. Manufacturers selling the greatest
volume of trucks in the United States are large, international corporations. Of these larger
corporations, affected heavy-duty vehicles make up a small portion of total corporate revenues.
Corporations such as Ford, Chrysler, General Motors, Mitsubishi, and Nissan gain the largest share
of revenues from automotive sales, financial services and electronics. Their diverse array of
products are sold throughout the world. Pans and dealerships are often supplied by many
independent, unrelated sources.
Truck manufacturers such as Mack, Kenworth, Peterbilt, and Freightliner, while smaller and
specializing primarily in the making of trucks and truck parts, are subsidiaries of larger, international
corporations. For example, Mack Truck Inc. was entirely purchased in 1990 by Renault.2 Similarly,
Freightliner is associated with Daimler-Benz.
Other companies, such as Western Star, Bluebird, Oshkosh, and Flxible sell specialized
vehicles (i.e. school buses, dump trucks, city transit buses). Market share and total revenue are much
smaller than the largest truck manufacturers. These smaller companies invariably purchase their
engines from another company, rather than bear the costs of producing them in house.
Table 3-7 lists the majority of truck manufacturers producing Class 2B through Class 8
trucks. The table also provides information regarding the size of the companies and lists and other
business interests.
27
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Final Regulatory Impact Analysis
Table 3-6
Factory Sales of 1993 Complete Heavy-Duty Vehicles
Manufacturer
Vehicle Category
Total
23*
3
4
5
6
7
8
Bus
Chrysler
52,297
13,826
66,123
Ford
218,960
21,455
5,708
24,408
16,407
3,055
289,993
Freightliner
492
2,869
37,667
41,028
Mercedes Benz
1
4
5
General Motors
160,070
7,894
2
8,620
16,427
3,030
196,043
Kenworth
124
17,873
17,997
Mack
675
461
16,662
17798
Navistar
7,474
32,809
32,582
14,665
87,530
Peterbilt
97
15,778
15,875
Volvo GM
684
19,376
20,060
Western Star
1,045
1,045
Hino Diesel
1
258
291
472
339
1,361
Isuzu Truck
5,811
3,235
1,451
1,394
217
12,108
Mitsubishi Fuso
2,421
930
715
303
4,369
Nissan Diesel
724
475
770
807
246
3,022
'Class 2B sales were estimated as 35 percent of total Class 2 sales for each manufacturer.
SOURCE: AAMA Motor Vehicle Facts and Figures, 1994 Edition.
28
-------
Chapter 3: Industry Characterization
Table 3-7
Truck Manufacturers' Parent Company Profile
Parent Company
Truck
Manufacturers
Total Revenues
in 1994
Total Employees
in 1994
Other Business Interests
Chrysler
Dodge, Jeep
$52,224 billion
121,000
Automotive, Financial,
Electronics
Daimler-Benz
Freightliner
about SI00 billion
326,400
Automotive, Electronics,
Space Tech., Defense Tech.
Ford Motor
Ford
overS 130 billion
337,778
Automotive, Financial,
Auto Rental
General
Automotive
Flxible
S220 million
(only Flxible)
1000
(only Flxible)
General Motors
GMC, Chevrolet
$123.1 billion
692,800
Automotive, Financial,
Insurance, Electronics,
Locomotives
Hino Motors
Hino Diesel
$5.1 billion
9,151
Buses
Isuzu Motors
Isuzu Truck
$10.87 billion
Automotive, Parts, Buses
Mitsubishi
Mitsubishi Fuso
Over $100 billion
Over 70,000
Automotive,
Raw Materials
Navistar
International
Navistar
International
$4.69 billion
13,612
Buses, Ambulances,
Financial
Nissan Motor
Nissan Diesel
—
143,754
Automotive
Oshkosh Truck
Oshkosh Truck
—
2,400
Truck Trailers, Fire Trucks
Paccar
Kenworth, Peterbilt
$4,285 billion
over 10,000
Parts, Winches, Oil Well
Equip.
Renault
Mack Truck
$970 million (Mack
only)
5,459 (Mack only)
Volvo GM
Volvo
73,641
Automotive, Buses, Marine,
Food, Energy
Western Star*
—
—
—
—
Other
Bluebird, Novabus,
more
¦
•Data not available.
SOURCE: DIALOG Database.
29
-------
Final Regulatory Impact Analysis
D. Future Truck Sales
In attempting to determine the behavior of future sales of trucks there are a few clues
provided in the engine sales data from Figures 3-1 through 3-7. First, the PSR database provides
projections for sales for the year 1995. In most cases, a slight increase in sales from 1994 to 1995
is predicted with the exception being Class 8 trucks and buses, but in these cases these are not severe
drops and may be caused by a market surplus from extremely vigorous sales in the previous few
years as the country pulled out of a recession.
To some degree heavy-duty vehicle sales are a subject to the fluctuations of the economy just
as the automotive industry is. This is particularly evident when viewing Figure 3-8, which clearly
shows the downward trend of sales and a subsequent recovery corresponding to two major recessions
of the recent past: the recessions of the early 1980s and the early 1990s. However, throughout the
time period shown on the figure there has been a general increase of sales.
As was previously discussed, another factor that can affect relative sales is the migration of
sales from one vehicle class to another. Possible illustrations of this point are shown in Figures 3-1
and 3-2 and also in Figures 3-3 and 3-4.
The trend of dieselization will also play an important role in future sales of heavy-duty
vehicles. The apparent result, of course, is that fewer gasoline heavy-duty vehicles will be sold in
the market. Classes 5 and 8, for example, no longer have any sales of gasoline powered vehicles and
other classes show trends in that direction. Diesel vehicles generally are more economical to operate
and should show an even increased share of the market in the future provided they retain the
economical advantage over gasoline in the heavy-duty truck classes.
Sales of trucks in the 1990s have, in general, gradually increased each year after a series of
fluctuations during the 1980s. Figures and predictions for 1994 and 1995 have also generally
followed the gradual increase, according to AAMA and individual manufacturer's reports. Market
data from individual manufacturer's reports also supports a continuation of gradual growth.
However, a complete sampling of truck manufacturer's growth predictions was not available.
A more detailed history of truck sales is provided in Table 3-8 below. The data through
1993, was provided by AAMA and excludes import truck sales. The data for 1994 and 1995 is based
on engine manufacturer submittals to EPA of heavy-duty engine production. Note that the total
number of heavy-duty vehicles sold in 1994 was about 300,000 higher than in 1993 and sales
continued to increase in 1995. The sales increase was apparent throughout all vehicle classes,
especially for the light and heavy heavy-duty trucks.
30
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Chapter 3: Industry Characterization
Table 3-8
New Retail Domestic Truck and Bus Sales*
YEAR
Vehicle Class
Total
2B**
3
4
5
6
7
8
1980
341.185
3,510
195
2.309
89.764
58,436
117,270
612,669
1981
297,482
748
12
' 1,916
71,993
51,402
100,334
523,887
1982
336,372
1,062
9
1,434
44,214
62,488
75,777
521,356
1983
422,310
145
2
1,159
46,532
59,383
81,647
611,178
1984
428.483
6,019
4
5.417
55,482
78,479
137,693
711,577
1985
448,075
10,854
0
5,081
48,358
96,973
133,581
742,922
1986
424,782
11,558
0
5,905
44,796
100,713
112,871
700,625
1987
411,278
14,007
2,129
8,185
44,282
102,583
131,156
713,620
1988
466,585
14,228
21,181
8,268
53,599
103,042
148,361
815,264
1989
454,087
19,161
27,031
7,243
39,128
93,446
145,068
785,164
1990
383,942
20,873
27,453
5,055
38,209
85,345
121,324
682,201
1991
306,690
21,256
23,829
3,301
22,445
72,598
98,711
548,830
1992
357,381
25,519
25,631
3,589
27,725
73,229
119,057
632,131
1993
431,335
26,947
33,317
4,288
26.642
80,793
157,886
761,208
1994
(gasoline;
light
heavy
413,679
51,129
464,808
1994
light
medium
heavy
(diesel)
256,339
130,543
189,928
576,810
1995
(gasoline)
light
heavy
483,928
59,811
543.739
1995
(diesel)
light
medium
heavy
279,789
139,895
217,247
636,931
~Any differences between the sales figures in this table and the numbers from Figures 3-1 through 3-8 are explained by the
fact that the numbers from the Figures represent the total engine sales in the United States both domestic and
imported, while the sales up through 1993 in this table are representative of AAMA member United States domestic
vehicle production.
** Sales for class 2b were assumed to represent 35 percent of the total class 2 sales.
SOURCES: AAMA Motor Vehicle Facts and Figures (1994 edition), and engine manufacturer submittals to EPA.
31
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Final Regulatory Impact Analysis
With these factors in mind it is still not easy to determine any long-term sales trend for the
heavy-duty vehicle market. It has been shown that diesel engines are gaining prominence over
gasoline engines in the heavy-duty engine market; the economy has a critical effect on this highly
cyclical industry, and there may be some reapportioning of sales from some weight classes to
another. But overall the trend has been, and should continue to be, towards increasing sales in this
industry. The degree of increasing sales may vary for each weight class. Figure 3-8 provides a
composite picture of the sales history of heavy-duty engines (except for class 2B, which is excluded
because of uncertainties with the data). This figure illustrates the overall industry trends of cyclical
sales periods, with clear long-term growth.
IV. Engine Rebuilding
Some of the provisions of this rule address issues related to engine rebuilding practices. The
provisions detail what the Agency would consider a violation of the tampering prohibitions
established in the Clean Air Act. Essentially, the provisions were adopted to ensure that emissions
controls are not removed or otherwise dismantled during the process of rebuilding an engine. The
requirements are consistent with current customary rebuilding practices. Engine rebuilders
customarily rebuild to original specifications and restore engines to like new condition. As such,
the provisions do not place new requirements or burdens upon rebuilders but only emphasize
rebuilder's obligations under the CAA. To better understand the engine rebuilding industry,. EPA
contracted with ICF incorporated to conduct an industry characterization.3 EPA has also conducted
a study of engine rebuild practices as required under Section 202(a)(3)(D) of the Clean Air Act.4
The following contains a summary of ICF's findings. The reader is directed to the ICF report as well
as the EPA study for further details regarding rebuild industry characteristics and rebuild practices.
A. Light Heavy-Duty Diesel Engines and Heavy-Duty Gasoline Engines
It is estimated that it will take the average light heavy-duty diesel engine eight years to reach
the point of needing to be rebuilt or replaced. After this relatively long period of time the truck body
deteriorates to a point where it is no longer practical to rebuild the engine. Engine manufacturers
have stated that there is no real demand for rebuilding these engines and, in fact, light heavy-duty
diesel engines are not designed to facilitate rebuilding.
Similarly, heavy-duty gasoline engines are rarely rebuilt. On the rare occasion that these
engines are rebuilt, it is generally only when a premature failure takes place. Approximately one
percent of heavy-duty gasoline engines, or about 40,000 units, are rebuilt each year.
B. Medium and Heavy Heavy-Duty Diesel Engines
The vast majority of engine rebuilding occurs with class 6-8 heavy-duty diesel trucks and
buses, which typically fall into EPA's medium and heavy heavy-duty engine subclasses. Trucks in
these classes are designed to last for many years and the engines are usually designed with
replaceable cylinder liners (sleeved) which allows the engines to be rebuilt easily and several times,
32
-------
Chapter 3: Industry Characterization
as necessary. Table 3-9 contains general information regarding the class 6-8 truck population. The
table shows a population trend toward larger vehicles, with a decreasing Class 6 population and
increasing Class 7 population. Because a minority of class 6 and 7 engines are not sleeved and
because they accumulate mileage at a slower pace, rebuilding in those classes is common but not as
prevalent as with class 8 trucks.
Table 3-9
Heavy-duty Diesel Engine Population and Rebuild Estimates
Truck
Class
1990
Population
1995
Population
2000
Projected
Population
1995 Average
Mileage to
Overhaul
1995 Number
of Rebuilds
6
464,993
354,370
283,630
297,654
37,149
7
685,832
793,540
972,370
411,300
45,795
8
1,411,409
1,650,112
1,817,860
511,119
243,490
SOURCE: DataMac database, MacKay & Company, 1995
The cost of engine rebuilding is typically in the range of $6,500 - $8,500 for class 8 engines
and $4,000 - $5,500 for class 6 and 7 engines, which compares very favorably with the cost of a new
engine which ranges from about $12,000 for classes 6 and 7 to about $22,000 for class 8. The cost
varies depending on the extent of the rebuild process. Rebuilding will most always include replacing
cylinder components and other engine component such as camshafts, as needed. If the engine is
removed from the vehicle (out-of-frame rebuild) more parts will be replaced than if the engine is
rebuilt while remaining in the vehicle. The ratio of in-frame to out of frame rebuilds was about 2:1
in 1995. Engine rebuilding may also include rebuilding the fuel system and additional components
such as the turbocharger, especially during an out-of-frame rebuild. ICF confirmed EPA's earlier
findings and the comments received by EPA that it is standard rebuild industry practice to rebuild
to original engine specifications, regardless of what type of company is conducting the rebuild. By
rebuilding to original specifications, the rebuilder ensures proper engine operation and durability.
Engine rebuilding is triggered by a variety of criteria depending the owners preferences for
addressing the issue. Primarily, rebuilding is triggered by a loss of performance such as a decrease
in power or increase in fuel or oil consumption. Also, it is common for rebuilding to occur when
the engine has had a catastrophic failure. Although rebuilding is not usually a scheduled
maintenance event, some fleets may monitor mileage, and use mileage as a criteria for when to
rebuild an engine.
C. Rebuilding industry Characterization
Engine are rebuilt by the following groups: vehicle owners/fleet operators, truck dealerships.
33
-------
Final Regulatory Impact Analysis
engine distributors, independent garages, and factory remanufacturers. Factory remanufacturers
refers to large factory engine rebuilders that perform engine rebuilds in an assembly-line style
operation. Engine cores are shipped to the remanufacturer as they are traded-in and the owner is
supplied with a remanufactured engine. The remanufacturer disassembles the engine completely and
then rebuilds it in an assembly-line operation. There are remanufacturers that are operated by the
engine manufacturers (OEMs) and there are independent facilities. Most other types of rebuilders
are custom rebuilders that work on engines individually as they need to be rebuilt. Table 3-10 shows
the number of rebuilds performed by each group and the number of companies in each group.
Table 3-10
Engine Rebuilders
Rebuilder
Total Annual
Rebuilds
Number of
Companies
Engine Distributor
22,900
180
Truck Dealer
61,200
1,800
Vehicle Owner
175,600
407,800
Independent Shop
33,100
2,800
OEM Factory
Remanufacturer
21,900
6
Independent Factory
Remanufacturer
2,600
4
Using $25 million in revenues as a threshold to differentiate between large and small
businesses, all independent garages and the large majority of truck dealerships are small businesses
which may perform engine rebuilds as a source of revenue. Independent garages, truck dealerships
and engine distributors typically offer a wide range of engine and vehicle related services including
engine rebuilding. ICF estimated that there are perhaps 400 to 500 independent shops which rely
on heavy-duty engine rebuilding as a key source of revenue, performing 40 to 50 rebuilds each per
year on average. Other shops perform heavy-duty engine rebuilds infrequently. Likewise, truck
dealerships and engine distributors offer a wide range of engine and vehicle related services. ICF
estimated that for truck dealerships, engine rebuilding represents about 7 percent of revenue and
about 20 percent of total dealer profit. ICF also reported that smaller truck dealers focus on
preventative maintenance rather than engine rebuilding.
Engine distributors are licensed by the original engine manufacturer and provide new
engines, remanufacturered engines, parts, and OEM-warrantied engine rebuilds. Historically,
distributorships were established by Class 8 engine manufacturers to sell and service engines and
most of the major OEMs have 25 to 40 distributorships nationwide. Class 8 vehicles are more likely
34
-------
Chapter 3: Industry Characterization
than class 6 or 7 vehicles to be designed to be equipped with engines from several different
manufacturers. Distributors seek to secure large volume engine orders and also provide engine
servicing.
For truck fleets, rebuilding is an expense rather than a revenue source. ICF found that fleets
begin to have their own maintenance facilities at about 10 vehicles, but small fleets typically do not
conduct many rebuilds. Large fleets often have rebuilding facilities and conduct the bulk of the fleet
rebuilds. However, some large fleets sell their vehicles before the engine need to be rebuilt and also
it is becoming more common to out-source rebuilds as the time before the rebuild point increases.
Rebuilding is increasing in complexity with the addition of new technologies such as electronic
controls which also steers fleets in the direction of out-sourcing.
Table 3-11
Fleet Rebuilding Estimates
Trucks in
Fleet
Number of
Fleets
Number of
Vehicles
Rebuilds
per Year
1-9
366,375
661,964
72,627
10-24
25,051
383,486
25-99
12,547
350,657
102,936
100-499
2,947
313,473
500+
855
1,088,770
35
-------
Class 3 & 4 Truck
Sales Changes
60000
50000 - -
40000
cn
®
as
to
® 30000
c
O)
c:
UJ
20000
10000
80 81 82 83 84 85 86 87 88
Year of Sales
CI Engines
SI Engines
Figure 3.1
-------
Class 5 Truck Engines
Sales Changes
8000
7000
6000
5000
e 4000
3000 ^
2000
80 81 82 83 84 85
86 87 88
Year of Sales
CI Engines
SI Engines
89 90 91 92 93 94
Figure 3.2
-------
80000
70000
60000
10000
Class 6 Truck Engines
Sales Changes
50000
e 40000
30000 '
20000
80 81 82 83
86 87 88
Year of Sales
90 91
CI Engines
SI Engines
Figure 3.3
-------
80000
70000
60000
Class 7 Truck Engines
Sales Changes
80 81
50000
« 40000
3000O
20000
10000
86 87 88
Year of Sales
CI Engines
SI Engines
Figure 3.4
-------
Class 8 Truck Engines
Sales Changes
200000 ¦
150000
®100000
50000
82 83
86 87 88
Year of Sales
93 94
Ci Engines
SI Engines
Figure 3.5
-------
40000
35000
30000
Bus Engines
Sales Changes
25000
o 20000
15000
10000
80 81
86 87 88 89
Year of Sales
CI Engines
SI Engines
92 93 94 95
Figure 3.6
-------
Motor Home Engines
Sales Changes
20000
15000
<0
«J
(a
«10000
c
5)
c
UJ
5000
89 90 91
Year of sales
CI Engines
SI Engines
92 9i 94
Figure 3.7
-------
Heavy Duty Engines (Except Class 2b)
300000
Sales Changes
250000
200000
10
0)
CO
CO
e150000
c
CD
C
UJ
100000
50000
80 81
83 84
85 86 87 88
Year of Sales
90 91 92 93 94
CI Engines
SI Engines
Figure 3.8
-------
Intercity Freight Movement by Trucks
Ton-Miles
1000 -- - 30
50 55 60 65 70 75 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93
Year
r" Aclual Ton Miles Percent ol Total
Figure 3.9
-------
Chapter 3: Industry Characterization
Chapter 3 References
1 .PSR Database, 1995.
2. Forbes Magazine,"Mack Malaise", April 11, 1994, p. 73.
3. "Industry Characterization: On-road Heavy-duty Diesel Engine Rebuilders", Prepared by ICF
Incorporated for U.S. Environmental Protection Agency, Contract Number 68-C5-0010, Work
Assignment 102, Final Report, January 3, 1997, Docket A-95-27.
4. "Heavy-Duty Engine Rebuilding Practices." EPA Final Report by Tom Strieker and Karl
Simon, March 21, 1995.
45
-------
Final Regulatory Impact Analysis
46
-------
Chapter 4: Technological Feasibility
CHAPTER 4: TECHNOLOGICAL FEASIBILITY
The purpose of this chapter is to discuss the feasibility of further reductions in highway
heavy-duty diesel engine emissions beyond the 1998 federal emission standards. EPA anticipates
that, by 2004, heavy-duty diesel production engines will be capable of greatly reduced exhaust
emissions with little or no penalty for fuel consumption or durability. This conclusion is based on
publicly available data on laboratory prototype systems, technology proven in other applications,
the availability of substantial lead time, and the application of sufficient research and development
funds.
The following sections describe the key technology that may be used to control emissions
from highway heavy-duty engines by the 2004 model year. Technological projections are based on
information on current developments. This chapter also discusses some strategies for continued
emission control development beyond 2004. The organization of this discussion is divided into five
main topics: background, engine controls, aftertreatment, developmental technology, and fuels.
I. Background
Heavy-duty diesel engine manufacturers have been very successful in lowering particulate
matter (PM) and oxides of nitrogen (NOx) levels concurrently to meet increasingly stringent EPA
emission standards. EPA standards have required a reduction in NOx emissions of over 50 percent
(10.7 g/bhp-hr to 5.0 g/bhp-hr) and PM reduction of over 80 percent (0.60 g/bhp-hr to 0.10 g/bhp-hr)
largely within the last five years. Engine manufacturers have been able to achieve the majority of
these reductions using engine technology, with minimal reliance on exhaust aftertreatment
technology. Today's heavy-duty diesel engines are also well below the standards for hydrocarbons
(HC) and carbon monoxide (CO). Over this same period, engine manufacturers have been able to
provide their customers with increased fuel economy and improved engine durability. Based on a
review of current emissions research, EPA believes that emission control improvements from engine
design changes have not yet leveled off.
Simultaneous control of NOx and PM presents a particular challenge. PM results from the
incomplete evaporation and combustion of fine fuel droplets. High combustion temperatures cause
nitrogen in the intake air (and to a lesser degree in the fuel) to combine with available oxygen to
form NOx. NOx emissions are controlled primarily by lowering peak combustion chamber
temperatures. However, simply lowering combustion temperatures can lead to an increase in PM
formation because PM is less thoroughly oxidized at lower temperatures. NOx control strategies
such as retarding fuel injection timing by themselves are limited because they cause an increase in
PM. Engine manufacturers have had to devise more sophisticated emission control strategies due
to this trade-off. Engine manufacturers have used a variety of technologies, often balancing their
effects and optimizing among them to achieve the emission standards.
47
-------
Final Regulatory Impact Analysis
Lowering both NOx and PM has been accomplished primarily through improvements to the
combustion chamber, intake air system, fuel injection system, and the use of electronic controls.
NOx has been controlled substantially through charge air cooling, i.e., cooling the intake air by
passing it througn a heat exchanger. The key to PM control has been improved mixing of the fuel
and air within the cylinder through the use of higher fuel injection pressures to better atomize the
fuel and through better combustion chamber design. Improved turbocharger control and cylinder
ring design for decreased oil consumption have also been important. Fuel injection control has been
critical for both PM and NOx reduction. It is very important to ensure that the appropriate amount
of fuel is injected at the appropriate time. Many engines are now equipped with electronically
controlled fuel injection, lowering emissions and providing better fuel economy. Some engines are
also equipped with oxidation catalysts for additional PM control.
It appears that manufacturers will rely on a variety of technologies to achieve the 1998 NOx
standard of 4.0 g/bhp-hr. It is likely that manufacturers will continue refining the above technologies
to continue to meet the standards. Chapter 5 includes detailed assumptions about these baseline
technologies.
Engine manufacturers, independent laboratories, universities, and government laboratories
are conducting substantial research on a variety of engine-based and aftertreatment technologies to
control emissions, as well as fuel and fuel additive innovations and changes. This chapter examines
their efforts to reduce NOx emissions below the 1998 standard of 4.0 g/bhp-hr while maintaining
PM emissions levels at or below 0.10 g/bhp-hr. These technologies are examined below in detail
because they are likely to continue to be very important. Also, some technologies not yet being used
widely on production heavy-duty diesel engines, such as EGR, NOx reduction catalysts, and split
fuel injection are reviewed. Such technologies could be very helpful in reaching NOx levels
substantially lower than 4.0 g/bhp-hr.
It should also be noted that in addition to their own programs, engine manufacturers have
been participating in significant cooperative research projects with goals similar to EPA's goals. The
Department of Energy is coordinating a heavy-duty diesel engine program with emission goals of
2.5 g/bhp-hr for NOx and 0.05 g/bhp-hr for PM by 2000 on a test engine. Most domestic
manufacturers are participating in this program, which began in 1994 and has an estimated annual
budget ranging from $6 million to $10 million for emissions research and development alone.c Also,
sixteen engine manufacturers are funding a cooperative research and development program at
Southwest Research Institute (SwRI) called the Clean Heavy-duty Diesel Engine Program. The
program is looking at engine technology and has goals of 2.0 g/bhp-hr for NOx and 0.05 g/bhp-hr
for PM. The program has finished the first five years with encouraging results.d
cThe overall annual budget ranges from $12 to $20 million and covers fuel efficiency
improvements and alternative fuels R&D.
dUnder the agreement, no one may release or discuss actual results for two years after the
program concludes. There has been and will be a lot of research and development progress that
48
-------
Chapter 4: Technological Feasibility
Indications are that NOx and PM control technologies have not yet reached their potential.
Current published research shows that NOx levels of 2.0 g/bhp-hr with a PM level of 0.10 g/bhp-hr
can almost be achieved in laboratory diesel engines now. Unpublished and confidential research
such as that done at SwRI probably represent even more advanced research efforts. For the 2004
time frame, these and other technologies could be optimized to meet and possibly exceed future
emission targets.
II. Engine Controls
For the purpose of this discussion, engine combustion technology has been separated from
exhaust aftertreatment technology. However, in actual heavy-duty vehicle design, both types of
technology may be used together. This section will discuss several engine emission control
technologies and their interactive effects on emissions and performance. For simplicity and clarity,
each technology is first described individually. After the technologies are described, emissions data
from various technology combinations will be presented.
A. Combustion Optimization
Several parameters in the combustion chamber of a heavy-duty diesel engine affect its
efficiency and emissions. These engine parameters include: charge air and peak cylinder
temperature and pressure, turbulence, valve and injection timing, injection pressure, fuel spray
geometry and rate, combustion chamber geometry, air-fuel ratio, compression ratio, and exhaust in
the cylinder. As the engine operates under changing load and speed, the effects of these parameters
will change.
Many technologies that are designed to control the engine parameters listed above have been
investigated. However, a positive influence on one parameter may have a negative influence on-
another. For example, decreasing combustion temperature will retard NOx formation but will
increase HC and PM due to incomplete combustion. Therefore, combinations of technologies are
often used to optimize the engine parameters. To attain significant reductions in HC and NOx from
1998 levels without penalties in other emissions or performance, a combination of approaches will
be necessary.
1. Timing retard
The effects of injection timing in diesel engines on emissions and performance are well
established.I 2-3,4 Retarded timing is an inexpensive method of reducing NOx emissions and is
already used to some degree. NOx is reduced because the premixed burning phase is shortened and
because cylinder temperature and pressure are lowered. Too much timing retard results in
undesirable increases in HC, CO, PM, and fuel consumption. These increases are due to the end of
is not published.
49
-------
Final Regulatory Impact Analysis
injection being later in the combustion stroke, shortening the time for fuel to burn, and due to the
lower temperature and pressure in the cylinder. Technologies that can offset the negative effects of
retarded timing will be discussed in further detail below.
2. Compression ratio
Compression ratio is another engine design parameter that impacts emission control. In
general, higher compression ratios cause a reduction in PM emissions and improved fuel economy,
but also cause an increase in NOx emissions. However, higher compression ratios require a stronger
engine structure, which may increase weight and cost. The increased engine weight and frictional
losses somewhat offset the fuel economy benefit of higher compression ratios, especially at very
high compression ratios. Conversely, lower compression ratios generally cause a reduction in NOx
emissions while causing an increase in PM emissions and decreased fuel economy. Also, low
compression ratios can lead to problems with starting a cold engine if the cylinder pressure and
temperature are not high enough to create ignition.
3. Combustion chamber geometry
Manufacturers have achieved significant emission reductions through changes to the
combustion chamber. Additional modifications to the combustion chamber may provide further
improvements in emission control. Combustion chamber parameters of interest include (1) the shape
of the chamber and the location of the fuel injector, (2) volume of crevices, and (3) the compression
ratio. The introduction of ceramic coatings to surfaces of the combustion chamber is another
possible modification in the experimental stage.
Efforts to redesign the shape of the combustion chamber and the location of the fuel injector
have been directed primarily at optimizing the relative motion of the air and the injected fuel. The
goal is to limit the formation of NOx without an increase in PM, or conversely, to reduce PM
without an increase in NOx. Reductions in both NOx and PM may be possible with some
combustion chamber configurations currently under development. However, significant problems
in the areas of structural durability and emission control durability have been attributed to these
configurations. Additional benefits can be realized in the form of reduced HC and CO emissions,
accompanied by little or no penalty in fuel efficiency. Costs would be limited primarily to initial
fixed costs such as research and development and tooling changes, which would not be very large
if spread over many engines.
The location of the top piston ring relative to the top of the piston has undergone significant
investigation. The location of piston rings has been modified to reduce the crevice volume, while
retaining the durability and structural integrity of the piston and piston ring assembly. Improvements
result in reduced HC emissions and, to a lesser extent, in reduced PM emission. Costs associated
with a relocation of the top ring can be substantial. Raising the top piston ring requires modified
routing of the engine coolant through the engine block and lube oil routing under the piston to
prevent the raised ring from overheating. Also, the machining needed for the engine block would
50
-------
Chapter 4: Technological Feasibility
likely require more precise tolerances.
4. Swirl
Increasing the turbulence of the intake air entering the combustion chamber (i.e., inducing
swirl) can reduce PM emissions from diesel engines by improving the mixing of air and fuel in the
combustion chamber. Historically, swirl was induced by routing the intake air to achieve a circular
motion in the cylinder. Manufacturers are, howt /er, increasingly using "reentrant" piston designs,
in which the top surface of the piston is cut out to allow fuel injection and air motion in a smaller
cavity in the piston to induce additional turbulence. The effect of swirl is often engine-specific, but
some general effects may be discussed.
At low loads, increased swirl will reduce HC, PM, and smoke emissions and fuel
consumption due to enhanced mixing of air and fuel. NOx is increased slightly at low loads as swirl
increases. At high loads, swirl causes slight decreases in PM emissions and fuel consumption at the
cost of severe increases in NOx emissions due to the higher temperatures associated with enhanced
mixing and reduced wall impingement. In addition, HC emissions may actually be increased due
to overmixing. These statements are based on data from an engine running at an intermediate speed
(63% of rated).5 A higher pressure fuel system can be used to offset some of the negative effects of
swirl, such as increased NOx, while enhancing the positive effects such as a reduction in soot.6
Another study used a small auxiliary combustion chamber with its own fuel injector to
induce turbulence late in the combustion period. Because the initial period of combustion was not
disturbed, the mixing in the combustion chamber aided in the combustion of unbumt hydrocarbons
without increasing peak cylinder temperatures. Therefore, smoke, PM and fuel consumption were
reduced without an increase in NOx emissions. In addition, thermal efficiency was improved at high
loads.7
B. Electronic Control
Many heavy-duty diesel engines are using open-loop electronic control to meter fuel flow
and injection timing. This control allows the fine tuning that is necessary to fully optimize engine
combustion for low emissions and fuel consumption. Several open-loop and closed-loop systems
have been developed for diesel engines.8 Especially when aftertreatment is used, closed loop control
will become important for the efficient operation of diesel engines. Closed-loop control logic is
discussed, in some detail, later in this chapter.
C. Charge Air Compression
Charge air compression is used in almost all current heavy-duty diesel engines. The original
purpose was to increase power output from a given displacement engine. By forcing more air into
the cylinder, more fuel can also be added at the same air fuel ratio, resulting in higher power. Boost
air may also be used to reduce fuel consumption and emissions of smoke and soot by increasing the
51
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Final Regulatory Impact Analysis
pressure and the amount of excess air in the cylinder. However, this increase in pressure and in
oxygen and nitrogen availability may result in an increase in NOx emissions.910
TurbocLaifeuig is the most common method used for increasing boost pressure into the
cylinder for four-stroke diesel engines. A turbocharger makes use of the waste energy in the exhaust
gas to compress the intake charge. The exhaust gas drives a turbine linked to a centrifugal
compressor that boosts the intake air pressure. Two-stroke diesel engines often use a positive-
displacement pump to scavenge the cylinder and increase air flow into the engine. Positive-
displacement pumps are very effective at increasing the cylinder charge, but they can cause a loss
in efficiency since they are mechanically driven by the drive shaft.
1. Turbo-compounding
At rated power, a typical diesel engine loses about 30 percent of its energy through the
exhaust. Even for turbocharged engines, much of this energy is not used since extra exhaust energy
is passed through a waste-gate. Turbo-compounding refers to using a high pressure turbine and
feeding extra energy back to the crankshaft. This is most efficient for engines operating at nearly
constant high loads and high engine speeds. Test data have reported up to 15 percent increase in
shaft power and 3-11 percent lower specific fuel consumption. Due to the high speed of the turbine;
however, it is difficult to couple the power turbine to the drive shaft. This is especially difficult
when the turbine and shafts must be matched over a wide range of operating speeds. There are some
durability issues due to the need for a fluid coupling to protect high-speed gears by absorbing
crankshaft vibrations.11
2. Variable geometry turbocharger
A turbocharger may have a lag time associated with its response. As a result, during transient
operation, too little intake air compression may occur at the beginning of an acceleration, while an
excessive boost may remain at the start of the next steady-state operation. In addition, a given
turbocharger optimized for high loads may have compromised efficiency at low loads. A variable
geometry turbocharger may be used to increase the boost response rate and provide appropriate
air/fuel ratios for varying loads and speeds. In one study, with the addition of electronic controls and
a variable geometry turbocharger, a heavy-duty diesel engine achieved a 37 percent reduction in HC
and a 34 percent reduction in PM emissions without an increase in NOx over a portion of the heavy-
duty Federal Test Procedure (HD-FTP).12
D. Charge Air Cooling
One negative effect of charge air compression is that the intake air temperature increases
substantially. As the intake air heats up, it expands, causing a somewhat lesser amount of charge
to be forced into the cylinder. In addition, an increase in charge temperature results in higher NOx
formation and engine durability problems. To solve these problems, charge air cooling is used.
Charge air cooling results in decreased smoke, HC, NOx, and PM emissions and fuel consumption.
52
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Chapter 4: Technological Feasibility
especially at high loads where most NOx is created.13
Charge air cooling is accomplished with aftercoolers on diesel truck engines. There are two
types of aftercoolers, each with unique characteristics: air-to-liquid aftercoolers and air-to-air
aftercoolers. The first manufacturers to introduce charge air cooling used air-to-liquid aftercoolers,
with the engine coolant as the cooling medium. Air-to-liquid aftercoolers using engine coolant can
lower the intake air temperature only to a level near the operating temperature of the engine.
However, the temperature of the charged intake air, and thus the level of emission control, remains
relatively constant over a wide range of ambient temperatures.
Air-to-air aftercoolers use a stream of outside air flowing through the device to cool the
intake air. By using ambient air, an air-to-air aftercooler can cool the compressed intake air to a
temperature approaching that of the ambient air. Manufacturers are now extensively using air-to-air
aftercoolers, because the more effective cooling contributes to lower NOx emissions. Intake air
temperature from an air-to-air aftercooler is highly dependent on ambient temperature. NOx control
would, therefore, be most effective in low ambient temperatures. However, unless manufacturers
limit the effectiveness of cooling in winter conditions, very low intake air temperatures may lead to
increased PM emissions. Converting to an air-to-air aftercooling strategy introduces a moderate cost
penalty.
Another possibility for getting more cooling than the conventional air-to-liquid aftercooler
is an air-to-liquid aftercooler using a separate coolant system. Such a system would cool intake air
temperatures almost as effectively as an air-to-air aftercooler and could reduce seasonal variations
in intake air temperature. Introducing a separate liquid system for aftercooling would be more
complex and costly than either of the other systems.
E. Advanced Fuel Injection
Emission control in a diesel engine may be improved through advances in fuel injection
design. Design variables for a fuel injector include injection pressure, number of nozzle holes,
nozzle hole size and shape, and fuel spray angle. In addition, the control of rate of fuel injection
adds greater dimension to the design of a low-emission engine.
1. Increased injection pressure
Increased fuel injection pressure achieves better atomization of the fuel droplets and enhances
mixing of the fuel with the intake air. This combination of reduced droplet size-and improved
mixing leads to more complete combustion, decreased unbumt hydrocarbons, and decreased
formation of PM. NOx emissions have been observed to increase due to higher cylinder pressures.14
A drawback of higher injection pressures is the cost involved in reinforcing the fuel injection system
and possibly the engine to deal with higher pressures, which might otherwise cause a decrease in
durability.
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Final Regulatory Impact Analysis
Higher fuel injection pressures also decrease the duration of the injection. Because the
duration of injection is shortened with high injection pressures, the start of fuel injection is delayed
causing lower combustion temperatures and reduced NOx. Decreasing the duration of injection
avoids the HC, PM and fuel economy penalties of retarded injection timing, because the termination
of fuel injection is not delayed.15 Nozzle geometry is used to optimize the fuel spray pattern for a
given combustion chamber design, to improve mixing with the intake air, and to minimize fuel
condensation on the combustion chamber surfaces.16
2. Rate shaping
Manufacturers can achieve greater control of the combustion process by controlling the rate
at which fuel is injected throughout the combustion process. This is commonly referred to as rate
shaping. Rate shaping may be performed mechanically or electronically through the use of pilot
injection or multiple injections.
NOx and PM emissions may be improved by varying the rate at which fuel is injected into
the cylinder. A low rate pilot injection may be used at the beginning of combustion to minimize
peak temperatures and pressures and to stabilize combustion. Pilot injection shortens the ignition
delay, therefore shortening the pre-mixed burning phase of combustion where most NOx is formed.
At low loads, NOx, PM, and fuel consumption can be reduced with some penalty in smoke.
Particulate formation is reduced due to a reduction of the soluble organic fraction (SOF). At retarded
timing, this reduction in SOF outweighs the increase in soot. At advanced timing, the SOF decrease
is approximately the same as the soot increase.17
Multiple injections may be used to shape the rate of fuel injection into the combustion
chamber. Two or three bursts of fuel can come from a single injector during the injection period.
The amount of fuel injected during each burst may be varied as well as the duration between bursts.
This sort of rate shaping has been shown to be capable of reducing PM without increasing NOx.
Because this strategy is most effective in conjunction with retarded timings, NOx can be reduced
through timing retard without an increase in PM. Multiple injections can be optimized to have little
effect on fuel consumption by controlling the total time from start of the first injection until the end
of the last injection.18
F. Exhaust Gas Recirculation
1. Hot EGR
Exhaust gas recirculation (EGR) is probably the most important diesel engine control
technology for obtaining significant NOx reductions below 1998 levels. Under this approach, a
portion of the exhaust gas is routed into the intake manifold. This has the effect of reducing peak
temperatures, and thus reducing NOx formation in the cylinder. However, PM emissions and fuel
consumption can be increased, especially if EGR is used at high loads. This strategy for NOx
control is currently used in most European light-duty diesel engines.19 At least one heavy-duty diesel
54
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Chapter 4: Technological Feasibility
engine using EGR will be marketed in the 1996 model year.
EGR reduces NOx by reducing the peak temperature in the combustion chamber. By diluting
the charge with inert gas, the adiabatic flame temperature is reduced. This has the opposite effect
of increasing oxygen availability during combustion. The recirculated gas also reduces peak
combustion temperature by absorbing some of the heat of combustion. This reduction in
temperature leads to decreased NOx formation and an increase in HC and PM emissions.20 At light
loads (10-15 percent or less), the potential adverse effects of EGR on fuel consumption, PM level,
and engine durability are minimal.
2. EGR cooling
There are several methods of controlling the PM emissions attributed to EGR. One method
is to cool the exhaust gas recirculated to the intake manifold. With EGR cooling, a much higher
amount of exhaust gas can be added to the intake charge. At light loads, there can be a small NOx
penalty due to increased ignition delay, but at high loads, some additional NOx reduction may result
from EGR cooling.21 Another method to offset the negative impacts of EGR on PM is through the
use of high intake air boost pressures. By turbocharging the intake air, exhaust gas can be added to
the charge without reducing the supply of fresh air into the cylinder.22
3. Soot removal in recirculated gas
The main challenge still remaining with EGR in heavy-duty diesel engines is the possible
negative effects of soot from the exhaust stream being routed into the inlet stream. Soot may form
deposits in the intake system, which could cause wear on the turbocharger or decrease the efficiency
of the aftercooler. As the amount of soot in the cylinder increases, so does the amount of soot that
will work its way past the piston rings into the lubricating oil. Soot acts as an abrasive in the oil and
increases engine wear, especially in the cams. One study showed that 15 percent EGR had a
significant effect on heavy-duty engine durability.23 The EGR fraction is defined as the mass flow
rate of the recirculated gas divided by the mass flow rate of the total intake charge.
A low-voltage soot removal device that reduces the soot in the recirculated gas by 50 to 84
percent has been developed. Engine wear was shown to be greatly reduced as a result of this device.
Testing was performed at 30 percent EGR.24 Another strategy for particle-free EGR is to recirculate
the exhaust gas after it has passed through a particulate trap. Traps typically can remove more than
90 percent of particulate matter, whereas some designs have achieved a 99 percent particle collection
efficiency.23-26
One study discusses a technology package designed to solve the problems of minimizing the
amount of intake charge displaced by exhaust gas and of fouling of the turbocharger and
intercooler.27 This technology package uses a variable geometry turbocharger, an EGR control
valve, and a venturi mixer to introduce the recirculated gas into the inlet stream after the intake air
is charged and cooled. The VGT is used to build up pressure in the exhaust stream. Once the
55
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Final Regulatory Impact Analysis
pressure is high enough, the EGR control valve is opened and the recirculated gas is mixed in to the
high pressure inlet stream in a venturi mixer. Although the recirculated gas is cooled, this cooling
is minimal to prevent both fouling in the cooler (due to condensation) and a large pressure drop
across the cooler.
Several bypass filtration designs exist to filter smaller particles out of engine oil.28 With
bypass filtration, a portion of the oil is run through a secondary unit which results in well filtered oil.
This type of filtration system could be used to minimize negative effects of soot in the oil that is
associated with high levels of EGR. At least one of design claims efficiencies of up to 99% in
capturing 1-micron particles. Another design is capable of removing water as well as particles less
than 1 micron in size. To accelerate vaporization of impurities and to maintain oil viscosity, a heated
diffiiser plate is used in a third design.
A hybrid EGR system is also being studied as a potential solution to durability problems
associated with recirculated diesel exhaust.29 In this system, a small gasoline engine is used to drive
the supercharger for a larger diesel engine. A portion or all of the gasoline engine exhaust can then
be fed into the intake stream of the diesel engine. Because of the lack of sulfuric acid and the very
low carbon content in the gasoline engine exhaust, the problems of wear and erosion of parts in the
diesel engine associated with EGR are alleviated. Another bonus of this system is that the boost
pressure is independent of the load and speed of the diesel engine. Therefore, there is more
flexibility in optimizing the emissions and fuel consumption of the diesel engine. The study
referenced above showed that the hybrid EGR system had about the same fuel consumption as a
conventional EGR engine, but with a larger NOx decrease.
G. Technology Combinations
Several manufacturers and institutions have been working on the challenge of achieving
further diesel emission reductions by using combinations of the engine-based technologies described
above. This section describes the test results obtained from each of these combinations. A summary
of the results described in this section is presented in Table 4-1. When comparing the technology
combinations in Table 4-1, note that the emission results for any two ot the combinations presented
are not necessarily determined by the same test cycle. Also note that none of these strategies include
the effects of particulate traps or lean NOx catalysts on emissions. As discussed below,
aftertreatment devices could result in additional emission reductions.
56
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Chapter 4: Technological Feasibility
Table 4-1
Reported Emissions from Various Technology Combinations
Technology Combination
(Focus on Engine Controls)
Test
Procedure
HC
g/bhp-hr
NOx
g/bhp-hr
PM
g/bhp-hr
Multiple injection and EGR
6 modes
—
3.7
0.11
Fuel injection and geometry
2 modes
—
3.5
0.10
Electronic unit injection, and EGR
17 modes
—
3.6
0.08
On/off cooled EGR and catalyst
transient
T
2.8
0.10
EGR and cooled boost air
1 mode
1.0
1.8
—
Cooled EGR and cooled boost air
3 modes
0.16
1.9
0.22
Cooled EGR and cooled boost air
3 modes
—
2.3
0.12
Cooled EGR and boost air, swirl
3 modes
0.10
1.9
0.13
Mult, inj., EGR, and cooled boost
1 mode
—
2.2
0.07
VGT, cooled EGR, venturi mixer
13-mode
—
1.8
0.08
EGR, rate shaping, and catalyst
transient
2.54 (HC+NOx)
0.13
EGR, optimized fuel and air systems
study
0.30
2.0
0.15e
1. Multiple fuel injection and EGR
EGR and several multiple fuel injection strategies were studied by instrumenting a single
cylinder version of a heavy-duty on-highway engine.30 A fuel system was used that was capable
of four independent injections at pressures ranging from 2,900 to 17,000 psi. A six mode simulation
of the HD-FTP was used for this study since a transient test was considered inconvenient for the
research environment. Over the six mode test, using four injections and EGR, the engine produced
NOx and PM levels of 3.7 and 0.11 g/bhp-hr, respectively. When operating at 75 percent load and
intermediate speed, emissions levels of 1.6 g/bhp-hr NOx and 0.11 g/bhp-hr PM were achieved.
2. Fuel injection and geometry
Effects of fuel injection pressure, rate shaping, timing, nozzle geometry, and spray angle
were studied on a single-cylinder diesel engine operating at 75 percent and 25 percent of peak torque
at 1600 RPM.31 At 75 percent load, an intermediate injection pressure was combined with a nozzle
eThis study reports 0.05 g/bhp-hr PM with the use of a particulate trap.
57
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Final Regulatory Impact Analysis
using sharp-edged orifices and a 125 degree spray angle to achieve NOx and PM levels of 3.5 and
0.05 g/bhp-hr respectively. The fuel consumption was slightly increased (1 to 2 percent) due to the
added timing retard used to control NOx. The same nozzle geometry was used at 25 percent load;
however, a lower injection pressure was used combined with rate shaping to control the premix burn
mode. NOx and PM levels of 3.8 and 0.2 g/bhp-hr were achieved. Note that these low emission
levels are without the help of EGR. HC emissions were not measured.
3. Electronic unit injection and EGR
A single cylinder diesel engine with a swept volume of approximately two liters was used
as an experimental engine for the purposes of emisssion design work for heavy-duty diesel engines.32
An off-the-shelf electronic unit injection (EUI) system was modified by increasing the injection
pressure from 23,200 to 27,600 psi, reducing the spray holes from 0.20 to 0.18 mm, and opening the
spray cone from 155 to 158 angle degrees. The EUI system was designed to respond to electronic
control of the injection timing and fuel quantity. Exaust was drawn from the outlet plenum chamber
and introduced into the inlet plenum chamber in a simple EGR system. The engine was tested over
17 steady state modes and the results were weighted in order to simulate what the results would be
on the HD-FTP. The final weighted results were 3.6 g/bhp-hr NOx and 0.08 g/bhp-hr PM.
4. On/off cooled EGR and oxidation catalyst
A heavy-duty diesel engine was equipped with a simple on/off cooled EGR system and
operated over the transient heavy-duty highway Federal Test Procedure (HD-FTP).33 Over the test
cycle EGR was varied from 0 percent at idle to 25 percent during periods of high speed and load.
With the addition of an oxidation catalyst, this engine was capable of reducing NOx to 2.8 g/bhp-hr
without raising PM above 0.1 g/bhp-hr. HC emissions were not reported.
5. EGR and aftercooled boost air
A single-cylinder diesel engine was equipped with EGR and tested for emissions and fuel
consumption for several injection timings and EGR ratios at an intermediate speed.34 Tests were run
using both replaced and additional EGR. Replaced EGR means that the recirculated gas replaces
some of the intake air. Additional EGR is achieved by using a supercharger to charge the intake air
so that a constant amount of fresh air enters the cylinder at each EGR ratio.
When 33 percent additional EGR was added to the intake charge, the NOx emissions were
about 1.8 g/bhp-hr without a significant increase in fuel consumption due to EGR. PM emissions
were not reported, but no significant increases in HC or smoke were observed when compared to
engine operation without EGR. In addition, further work showed that increased intake boost
pressure results in an enhancement of diffusion combustion, reduced ignition delay, and reduced
premixed burning.
6. Cooled EGR and intercooled boost air I
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Chapter 4: Technological Feasibility
In an attempt to develop a low NOx truck engine, cooled EGR was added to a six cylinder,
turbocharged and intercooled, diesel, direct injection engine.35 This engine was tested for emissions
and fuel consumption over three modes of the European R-49 13-mode test procedure. The
predicted R-49 emission results showed that the engine was capable of NOx emissions as low as
1.9 g/bhp-hr without a significant increase in fuel consumption. PM and HC emissions for this
calibration were 0.22 and 0.16 g/bhp-hr respectively.
7. Cooled EGR and intercooled boost air II
Cooled EGR was applied to a heavy-duty diesel engine with engine out emissions meeting
the US 1994 emission standards.36 The exhaust gas was routed downstream of the intercooler to
prevent fouling. This engine was tested for NOx and PM at a low, an intermediate, and a high load
(at intermediate speed). These modes were selected for their significance in the US HD-FTP. At
low load, NOx and PM levels of 2.0 and 0.15 g/bhp-hr were achieved with 30 percent EGR.
Medium load NOx and PM levels of 2.3 and 0.12 g/bhp-hr were achieved with about 7 percent EGR.
At high load and 5 percent EGR, NOx and PM levels were 2.6 and 0.10 g/bhp-hr respectively. HC
results were not reported.
8. Cooled EGR, aftercooled boost air, and swirl optimization
A single-cylinder diesel engine was equipped to have boost pressures and temperatures
equivalent to a typical multi-cylinder turbocharged and aftercooled heavy-duty diesel engine.37
Because the European R-49 13-mode test procedure is biased towards peak torque, the swirl ratio
was optimized for high load operation. This study showed that NOx and PM emissions of 1.9 and
0.13 g/bhp-hr respectively, are possible through the use of cooled EGR. At these NOx and PM
levels, HC stayed constant at 0.10 g/bhp-hr. Although only three modes of the R-49 were tested, the
final results are a projection of the full test. Boost pressures would have had to be increased
10 percent to maintain air-fuel ratios if the EGR were uncooled.
9. Multiple injections, EGR, and intercooled boost air
Emissions and fuel economy testing was performed on a single-cylinder diesel engine at
75 percent of peak torque at 1600 rpm.38 This engine was equipped with simulated turbocharging
and intercooling. Multiple injections were used as an injection rate shaping strategy aimed at
controlling the combustion process. The fuel was injected at pressures up to 120 MPa at a spray
angle of 125 degrees. Retarded timing and uncooled EGR were also applied to this engine. Through
the combination of 6 percent EGR and triple injection, NOx and PM levels of 2.2 and 0.07 g/bhp-hr
were achieved. There was some sacrifice in fuel consumption due to the retarded timing. This study
suggests that, by controlling the PM levels with multiple injections, engine durability problems
associated with EGR (i.e., lubrication oil contamination) may be reduced. HC emissions were not
measured.
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Final Regulatory Impact Analysis
10. VGT, cooled EGR and a venturi mixer
This study focused not only on significantly reducing NOx and PM from a heavy duty diesel
engine but also or. developing an EGR system that would be practical for real world use.39 The
engine used for this research was a six cylinder, turbocharged and intercooled engine with a rated
power of 420 hp. The main emission control used in this research was EGR. However, the paper
really focuses on how the EGR is applied.
Several difficulties were overcome. To avoid fouling of the turbocharger and intercooler,
and to minimize the mass of air displaced through EGR, the exhaust gas is recirculated downstream
of the intake air charging and cooling. This is accomplished through the use of a variable geometry
turbocharger and a venturi mixing unit. By closing the VGT, pressure builds up in the exhaust gas;
through the use of an EGR valve the exhaust gas can be released to the intake stream once the
pressure is high enough. The mixing venturi provides suction of the recirculated gas thus
minimizing the pressure loss in the EGR circuit. Some EGR cooling was performed, but this was
minimized to prevent fouling of the EGR cooler (through condensation) and to minimize the
pressure loss in the EGR circuit.
Final emission results were reported as 1.8 g/bhp-hr NOx and 0.08 g/bhp-hr PM. These
results are based on the 13-mode steady-state test procedure used for European emission standards
(ECE R49).
11. EGR, rate shaping, and catalyst
One heavy-duty diesel engine manufacturer presented intial results from a program which
has the goal of building a diesel engine that can achieve the 2004 emission levels finalized today
using current technology.40 The technical approach was as follows: 1) advanced fuel system with
rate shaping capability, 2) state of the art combustion system with EGR, 3) electronically modulated
air flow management with improved volumetric efficiency, 4) reduced mechanical parasitic, 5)
calibration optimization, and 6) a 1994 model year catalytic converter. The results at this stage of
the program are 2.54 g/bhp-hr HC+NOx and 0.126 g/bhp-hr PM. These results are based on the HD-
FTP using low sulfur fuel designed for use in California.
12. EGR with optimized fuel and air systems
A study of feasible NOx and PM levels from heavy-duty diesel engines was contracted by
the California Air Resources Board (CARB).41 This study concluded that, with the-application of
EGR to a 1994 production heavy-duty diesel engine and an optimization of fuel and air systems,
emission levels can be reduced significantly. Emission levels of 2.0 g/bhp-hr NOx and 0.15 g/bhp-hr
PM were reported to be feasible without a significant increase in HC (<0.3 g/bhp-hr) or fuel
consumption. Through the use of aftertreatment, the particulate emissions could be reduced to
0.05 g/bhp-hr.
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Chapter 4: Technological Feasibility
H. Crankcase Emission Control
When ignition occurs inside the combustion chamber in internal combustion engines, the
increase in cylinder pressure pushes a small amount of gases past the piston rings (blowby) and into
the crankcase. To prevent the crankcase from becoming pressurized, the gases must be vented from
the crankcase. A regulation requiring manufacturers to close the crankcase (preventing these gases
from being vented to the atmosphere) was the first measure used for reducing pollution from cars
and trucks in the U.S. In 1963, California adopted a resolution requiring closed crankcases in all
light-duty vehicles. Later, manufacturers installed crankcase emission control devices in all light-
duty vehicles and trucks to be sold in the U.S. A method known as a positive crankcase ventilation
(PCV) was used to recirculate blowby gases back to the intake manifold and control their flow
through the use of a valve. The most common PCV system used is one in which the air from the
crankcase is drawn through a hose from the air cleaner to one of the valve covers or to a crankcase
inlet below the intake manifold.42 Therefore, the blowby gases are reintroduced into the cylinder.
Closed crankcases using PCV systems have been used in gasoline vehicles since the late 1960s and
are also required in today's naturally aspirated diesel engines.43
Few studies have been conducted with the purpose of investigating crankcase emissions from
heavy-duty diesel engines. Table 4-2 summarizes crankcase emission data from one study where
three engines were tested:44
Table 4-2
Crankcase Emission Data
Pollutant
Crankcase Emission
Levels (g/bhp-hr)
Percent of
Corresponding
Exhaust Emissions
Percent of 2004
Standard Finalized
Todayf
HC
0.005 -0.013
0.2-4.1
1.0-2.6
NOx
0.001 - 0.009
0.01-0.1
0.05 - 0.45
PM
—
0.9 - 2.9
—
A more recent study done by Southwest Research Institute in 1993 provided similar
crankcase emission data from one heavy-duty diesel engine: 0.01 g/bhp-hr NOx, 0.01 g/bhp-hr HC,
and 0.01 g/bhp-hr PM.45 Even though these numbers might not appear very significant, one has to
take into consideration that crankcase emissions increase with engine life, which today, with proper
maintenance, can approach one million miles before rebuilding for line-haul trucks.46 None of the
'For simplicity, standards were assumed to be 2.0 g/bhp-hr for NOx and 0.5 g/bhp-hr for
HC.
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Final Regulatory Impact Analysis
engines reported had more than 500,000 miles. Presently EPA is conducting testing on a few heavy-
duty diesel engines to obtain more crankcase emission data.
Currently, turbocharged diesel engines are not required to provide crankcase emission
controls. The problem with recirculating blowby gases in turbocharged engines is that the durability
of turbocharger components and aftercooler effectiveness can be affected by the recycling of gases
that contain particulate matter and other potentially damaging particles. Routing gases to the intake
manifold after the compressor would require a pump due to the higher pressure there. One solution
to this problem has been applied to a new heavy-duty diesel engine. The 1994 Navistar T444E had
a closed crankcase in which the gases were recirculated to the intake manifold and a woven wire
element was installed in order to collect the oil and prevent it from reaching the turbocharger
compressor. According to Navistar, durability test data showed no deterioration of the turbocharger
as a result of the recirculation of crankcase gases.47 Other studies have shown the possible
connection of increased blowby gases with the presence of EGR in diesel engines.48 Although not
conclusive, the results might suggest that the increase in crankcase gases are due to higher wear of
the piston rings, likely caused by abrasive particles present in the recirculated gases.
Though still undergoing development, another method of separating particulate matter from
the crankcase gases going through the turbocharger is the inertial separator. Inertial separators
centrifuge particles to a collecting zone, drain them to the bottom and collect them in a reservoir.49
One problem with this option is its low separation efficiency of around seven percent. Other filtering
methods are also being studied, but none of them seem to be more efficient and economical than the
PCV system with a filtering element to remove the particulate. One concern, however, has to do
with the efficiency of the filter as the particulate accumulates and any required maintenance to
replace it.
III. Aftertreatment
As described in the introduction section, engine manufacturers have been very successful in
developing a mix of technologies to lower PM and NOx concurrently while continuing to improve
fuel economy and engine durability. Although EPA is not proposing a reduction in the highway
heavy-duty engine PM standard beyond the level of 0.10 g/bhp-hr (0.05 g/bhp-hr for urban buses),
PM control will continue to be very important. PM will remain a primary consideration along with
fuel economy and engine durability in the development of engines with lower NOx emissions. As
discussed above, HC emissions control has not been a primary focus for diesel engines due to their
relatively low HC emissions levels. With a NOx plus NMHC standard, HC emissions levels would
become a greater consideration in the packaging of technologies to meet overall emission targets.
Exhaust aftertreatment technologies for PM and NOx control are discussed in this section and any
effect of these technologies on HC is also noted.
A. Particulate Matter Control
Two aftertreatment technologies have received the most attention and use for particulate
62
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Chapter 4: T@©lhi(ni©fl
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Final Regulatory Impact Analysis
emissions. Catalyst manufacturers have been successful at developing catalyst formulations that
minimize sulfate formation.52 Catalyst manufacturers have also compromised in the placement of
the catalyst such that the exhaust is warm enough to achieve the needed SOF reduction but not so
warm as to cau^c substantial sulfate formation.53 Manufacturers have noted that fuel with sulfur
concentrations lower than 0.05 weight percent would permit the use of more active, higher efficiency
oxidation catalysts.
Oxidation catalyst development and use is likely to continue. Although it is still too early
to know exactly what combinations of technologies will be used to meet the 1998 standards of
4.0 g/bhp-hr NOx and 0.10 g/bhp-hr PM it is very likely that oxidation catalysts will be used at least
in some cases. Urban buses are also likely to meet their PM standard of 0.05 g/bhp-hr using in-
cylinder modifications and oxidation catalysts. Future improvements in oxidation catalysts will
likely provide marginal improvements in overall PM reductions and such refinements may prove to
be valuable to engine manufacturers.
2. Particulate trap
The promise of particulate reductions of greater than 90 percent and the 1994 and later PM
standard of 0.10 g/bhp-hr prompted the development of particulate trap technology in the late 1980s.
Particulate trap filters that capture a high percentage of the PM in the exhaust stream were
developed. These initial particulate trap filters needed to be regenerated (cleaned) after a period of
time because the filters eventually began to fill up, creating unacceptable backpressure on the engine.
For the first generation of trap systems, regeneration was often accomplished by heating the exhaust
with an electric heater or fuel burner to oxidize the particulate. The Donaldson Company led U.S.
trap system development with an electronically controlled system consisting of dual ceramic
monolith filters and electrical heating elements to regenerate the trap. In the 1992 and 1993 model
years, some urban bus engines equipped with the Donaldson system were EPA-certified and sold
in limited numbers. Engine manufacturers have been able to meet the 1994 particulate standards
with engine modifications and using oxidation catalysts where necessary and no trap-equipped
engines were certified for the 1994 model year.
Several companies and universities are developing a new generation of trap technologies
have the potential to be simpler, more reliable, and less expensive than previous systems. The
majority of research aid development is focused on devising new methods for trap regeneration.
A number of active and passive trap regeneration methods are in various stages of development and
testing.
Active regeneration generally involves the triggering of a trap regeneration mechanism at
fairly regular intervals based on an exhaust backpressure threshold for the engine. One example of
a newer approach for active regeneration is reverse pulse air regeneration, which uses compressed
air to blow PM out of the trap and into a separate container.54 The PM can then be burned by heating
the container either on or off the vehicle. By blowing out the trap rather than burning the PM within
the filter, the filter is not subjected to extreme temperature gradients that can lead to ceramic filter
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melting or cracking. As part of the Department of Energy programs described previously, Cummins
Engine Company is working on a microwave trap regeneration system that provides more uniform
heating of the trap core, avoiding extreme temperature gradients.55 The system uses a ceramic paper
core that is about 80 percent efficient. Cummins also reported that engine backpressure was below
target.
Many regeneration techniques being researched involve using catalyst materials that lower
the PM oxidation temperature to the range normally experienced in diesel exhaust. The addition of
a catalyst often provides HC reductions as well. Such systems are often called passive regeneration
systems because they do not require some action to take place for regeneration at regular intervals,
such as heating the PM or blowing the PM out of the trap. Instead, regeneration occurs somewhat
continuously depending on the exhaust gas temperature. Catalysts both in the form of coatings and
fiiel additives are being developed. Johnson-Matthey has developed a system that places a catalyst
at the inlet facing of the trap filter such that the exhaust flows though the catalyst before entering the
filter. This system is currently being field tested.56 The catalyst will oxidize sulfur and Johnson-
Matthey is requiring the use of fuel with a sulfur level much lower than EPA specifications. Fuel
additives including a cerium-oxide additive developed by Rhone-Poulenc and a copper-oxide
additive developed by Lubrizol Corporation also lower PM ignition temperatures.
Catalyst materials bring down the temperatures needed for oxidation, but still may be
challenged to reach the very low exhaust temperatures of diesel engines, which have been further
reduced by the use of air-to-air aftercooling. For systems using catalysts, it will be necessary to
optimize the system for the specific engine application under real world operating conditions. For
example, it would be important to know what percentage of the time the vehicles' exhaust
temperature will exceed the ignition temperature of the PM in the presence of the catalyst. If the
temperature remains lower than the PM ignition temperature for long periods of time, say during idle
and low load conditions, the PM will continue to accumulate in the trap. When ignition temperature
is reached, there may be too much PM in the trap, causing overheating and trap filter damage. It
may be necessary to have a back-up active regeneration system in some cases.
In addition to trap regeneration, trap filters continue to be an area of significant research.
Research is focused on developing more durable filter materials that can withstand the very high
temperatures experienced during some forms of trap regeneration. Examples of these filter materials
include glass fibsr pads sandwiched between wire mesh for support, porous and corrosion resistant
metal fibers, and silicon carbide. Filter development is also focused on reducing the amount of
exhaust backpressure and associated fuel economy loss caused by the trap. Additionally, there are
problems with ash in the exhaust stream, which the trap captures along with the particulate matter.
The ash does not oxidize during trap regeneration and over time builds up within the trap.
Eventually, the filter must be cleaned or replaced.
In the long term, traps may be among the mix of technologies considered by engine
manufacturers in meeting future standards, if a simple, relatively inexpensive system can be proven
effective and durable. For example, some researchers are exploring passing the exhaust through a
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Final Regulatory Impact Analysis
particulate trap before routing it through an EGR system.57 Passing the exhaust through the trap
could potentially address a critical problem with the use of EGR, namely oil contamination and
engine wear due to particulates being introduced into the combustion chamber. It may also take care
of any PM increase caused by the use of EGR, which may allow EGR to be used more aggressively
for NOx control (i.e., at higher rates or higher engine load conditions). Traps are likely to be more
practical for use with lighter engines, which have shorter lives, and with urban bus engines used in
fleets, due to special maintenance and durability considerations such as the potential need for filter
cleaning or replacement.
B. Oxides of Nitrogen Control
A few years ago, lean NOx catalytic converters for vehicles were a novelty and largely
impractical as a serious means of reducing NOx from diesel engine exhaust due to the difficulties
of reducing NOx in the oxygen rich exhaust environment, the transient nature of engine operation,
and the difficulties of introducing a reducing agent into the exhaust. The effective NOx reduction
results that have been obtained with stationary sources using commercial catalysts and ammonia or
urea as reductants are difficult to duplicate on mobile sources. Remarkable progress has been made
recently in the area of lean NOx reduction catalysts for mobile sources that use hydrocarbons as the
NOx reducing agent. The catalysts developed to date operate within narrow temperature ranges,
which limits their overall effectiveness because diesel exhaust temperature fluctuates over a wide
range during the transient operation of the engines. It may be possible to use multiple catalysts to
cover a broader range of vehicle operation thus providing better overall NOx control. Also, catalyst
manufacturers are working to develop catalysts that are effective over a broader temperature range.
Finally, closed-loop electronic control of the engine may be used to narrow the variations in the
exhaust to the catalyst.
The use of hydrocarbons as a reducing agent presents special challenges to the catalyst and
engine manufacturers. As with other catalysts, some lean NOx catalysts also have the ability to
reduce HC emissions depending on catalyst formulations and exhaust temperatures. It would be
important to ensure that the hydrocarbons are being oxidized by the catalyst and not passing through,
which may require careful monitoring of the timing and amount of HC being added. The systems
also must be optimized to reduce the fuel economy penalties associated with their use due the critical
importance of fuel economy to the trucking industry and other affected industries.
1. High temperature NOx catalyst
Until recently, the state-of-the-art lean NOx catalyst was a copper (Cu) catalyst supported
on a zeolite base with hydrocarbons injected or added. The Cu-zeolite is usually active at
temperatures above 350°C for both NOx and HC emission reductions.58 NOx reductions of about
15-30 percent between 350°C and 550°C have been achieved with Cu-zeolite catalysts.59,60
There are some significant problems to overcome with the Cu-zeolite catalyst. The Cu-
zeolite system performance degrades significantly after being exposed to very high temperatures in
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Final Regulatory Impact Analysis
furthermore, they retained 90 percent of this benefit from 192-229°C.80
3. NOx trap
Engelhard Corporation is working on NOx traps that could be used in addition to low or high
temperature NOx catalysts.81 The NOx trap absorbs NOx and holds it until the trap temperature
exceeds a certain point, at which time the trap releases the NOx. The trap would be particularly
useful for reducing NOx emitted during idle or low-speed load conditions where temperatures are
less than 100°C and catalysts are not operational. The temperature at which the NOx is released
varies depending on the trap material, which allows the trap to be designed for use with either a low
or a high temperature catalyst.82 One strategy for engines with a fair amount of operation at high
exhaust temperatures would be to use the trap in combination with a high temperature catalyst.
IV. Developmental Technology
Researchers continue to develop many creative strategies for reducing emissions and
improving performance of heavy-duty engines. This section discusses several emission control
strategies that are currently being researched. These strategies are discussed separately because EPA
believes that the 2004 emission standards finalized today may be met through the more conventional
methods described above. However, this does not imply that the following technologies will not be
feasible in the 2004 time frame. Unless otherwise stated, the following technologies could apply to
diesel or gasoline engines.
A. Water Injection
Water injection may be used in much in the same way as EGR for diluting the intake charge.
Water has a high heat capacity, which allows it to absorb enough of the energy in the cylinder to
reduce peak combustion temperatures. Testing on a diesel engine has shown a 40 percent reduction
in NOx with a water-fuel ratio of 0.5 with only a slight increase in smoke.83 Water dilution does
have significant challenges, however. Water condensation at low loads may result in rust and
dilution of lubrication oil, and dissolved impurities in the water may lead to deposits in the engine.
Additives would have to be added to the water to prevent freezing in cold weather. Finally, the
vehicle operator may not have any incentive to keep a water reservoir filled.
B. Ceramics
Manufacturers and suppliers are researching the possibility of adding ceramic materials to
the surfaces of the combustion chamber and particulate filters. Ceramic coatings may provide
effective insulation, allowing the engine to retain more energy in the products of combustion.
Retaining more energy in the combustion chamber increases peak combustion temperatures,
resulting in decreased PM emissions and possibly increased NOx emissions. Also, a greater portion
of the total energy contained in the fuel can be converted into useful work in the engine, improving
the engine's fuel efficiency. When combined with other modifications such as retarded injection
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Chapter 4: Technological Feasibility
timing and reduced fueling rate, the use of ceramics can result in reduced NOx emissions without
a loss in fuel efficiency. Expected costs for the use of ceramics would be moderate.
C. Hybrid Vehicle Designs
A hybrid vehicle uses an energy storage device as an aid to the engine. Through the use of
an energy storage device in the drive train of a heavy-duty vehicle, equivalent NOx emission levels
of 1-2 g/bhp-hr may be met with a 10 percent improvement in fuel economy.84 These benefits are
achieved in three ways. First, a smaller engine can be used to perform the same work. The engine
would charge the storage device during low load conditions. Energy in the storage device could then
be used to help the engine move the vehicle through high-load conditions. Second, the engine could
be optimized for operation at steady state. Energy to and from the storage device would be used to
meet the transient demands of the vehicle. Third, regenerative braking could be used to store energy
normally lost during braking.
Several types of storage devices have been investigated. Energy may be stored as momentum
in a high speed flywheel, as electricity in batteries, or as pressure in a hydraulic accumulator.
Flywheels may be the most promising option at this time. Battery technology has not yet developed
to the point where light batteries could be developed to last throughout a heavy-duty vehicle
operating life. Hydraulic accumulators are large and heavy and raise potential safety risks due to
high-pressure oil lines.
D. Plasma Catalysts
Research is being conducted into plasma catalysts for heavy-duty diesel engines. Plasma
catalysts use discharges of electricity, or extreme heat, to break both PM and NOx into their atomic
constituents. While this area of research shows promise for the future, it may not be a viable
alternative for the 2004 time frame.85 Due to its potentially extreme effectiveness, however, EPA
encourages continued work to realize viable plasma devices.
V. Fuels
The focus of this chapter has been on the technical feasibility of emission reductions from
heavy-duty diesel-cycle internal combustion engines. However, we should keep in mind that there
are potential benefits form changes in diesel fuel and there are alternatives to diesel fuel for heavy-
duty diesel-cycle internal combustion engines. In addition, there are alternatives to internal
combustion engines for heavy-duty vehicle applications. This section discusses some alternative
fuels and power sources that may be used in heavy-duty engines and vehicles in the future.
A. Diesel Fuel Quality
Starting on October 1, 1993, new EPA requirements affecting highway diesel fuel quality
went into effect.86 First, the sulfur level of diesel fuel was reduced to 0.05 weight percent. In
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Final Regulatory Impact Analysis
addition, diesel fuel must have either a minimum cetane of 40 or a maximum aromatics content of
35 volume percent. (CARB implemented separate requirements that apply to all diesel fuel sold in
California. California's sulfur limit is the same as the federal requirement; however, California has
different requirements for aromatics and cetane.) The main reason for implementing the federal
diesel fuel requirements was to allow the use of technologies on new engines that would not
otherwise be feasible, such as oxidation catalysts and trap oxidizers. EPA also noted that there
would be small decreases in PM, HC, and CO emissions from existing heavy-duty vehicles as a
result of the fuel changes.87
A number of test programs have examined the effects of various diesel fuel properties,
including sulfur, cetane level and aromatics content, among others, on heavy-duty diesel engine
emissions.88-89,90'91 The results of these test programs show that changes in the properties of diesel
fuel can have an effect on emissions. In recognition of this fact, the SOP acknowledged that changes
in the composition and improvements in the quality of fuel may be needed to make the standards
expected under the SOP feasible. EPA plans to work with the petroleum industry and engine
manufacturers to determine if further testing is needed. Based on the results of the evaluation, EPA
expects to make a decision as to whether further changes in diesel fuel quality will be necessary to
comply with the low NOx and NMHC standards as part of the 1999 technology review agreed to in
the SOP. If EPA determines that further fuel changes are necessary, EPA would proceed with a
separate fuels rulemaking to implement such changes.
B. Alternative Fuels
Diesel and gasoline are the predominant fuels used in internal combustion engines today.
However, engines have been developed and are in use that operate on alternative fuels such as
natural gas or alcohol. Many of these engines can operate on more than one fuel or fuel blend.
Although gaseous and alcohol fuels are not the only alternative fuels being researched, they show
the most promise for the near future.
1. Gaseous fuels
Several manufacturers are already producing compressed natural gas (CNG) and/or liquified
natural gas (LNG) heavy-duty engines for applications that traditionally called for diesel engines,
Detroit Diesel Corporation makes the DDC Series 50G, which is already being commercially used
in approximately 200 vehicles, mainly urban buses. The Series 50G is now being testing in other
heavy-duty vehicle applications. It has recently been installed in a Kenworth tractor for testing, as
well as in refuse packers in California and York City.92
About 600 gaseous-fueled Cummins L-10 engines have been sold in 44 different locations
in the United States. They are used mainly in urban buses (Spokane, Wa. has logged 2 million miles
on L-10 buses; Sacramento, California has 100 L-lOs used in buses). Many of the L-lOs run on
CNG. Cummins has recently installed ten of their new L-l 1 LNG engines in United Postal Service
and Overnight Express tractors for on-the-road testing. These engines currently rate at about 330
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Chapter 4: Technological Feasibility
hp with 900 to 1000 ft-lbs torque. Cummins also has a new, undesignated LNG engine in the greater
than 400 bhp range being tested in two refuse packers in Santa Barbara.93
Hercules makes two natural gas engines with displacements of 3.7L and 5.6L. The 5.6L,
which is a turbocharged aftercooled engine, is suitable for heavy-duty vehicle applications. Over
400 of these engines have been sold, mostly to urban bus and school bus manufacturers.94
One study was performed on a 220 hp ratural gas engine using the 13-mode ECE R49
steady-state test.95 This engine was equipped with a three-way catalyst and an electronically
controlled carburettor. Over the steady-state test, emission results of 0.07g/bhp-hr HC,
0.15 g/bhp-hr CO, 0.75 g/bhp-hr NOx, 0.04 g/bhp-hr PM were reported. During a transient "real bus
cycle," HC, CO, and NOx were considerably higher. This was probably due to an exhaust mixture
that was too lean for peak catalytic conversion efficiency. The authors stated that this could be
overcome with an optimization of the mixture formation system's dynamic characteristics.
As can be seen, a variety of heavy-duty natural gas engines are already commercially
available in many different load configurations. Emission levels from gaseous fueled engines are
typically around 2.0 g/bhp-hr NOx and 0.01 g/bhp-hr PM. Because hydrocarbon emissions from
natural gas vehicles are primarily methane, reactive hydrocarbon levels in the exhaust are very low.
Further development is expected to further reduce NOx and PM emissions from these engines.
2. Alcohols
The purpose of this section is to present alcohols as another alternative for reducing
emissions from mobile sources. The brief discussion below is only a glimpse of the technological
issues that alcohols raise. More complete studies can be found in the reference section of this
chapter.
For many years, alcohols have been known as potential transportation fuels. This interest
has resurfaced recently due to the advantages that alcohols offer in terms of reduced pollution and
increased efficiency. In addition, the desire to lessen dependency on oil imports has also helped
facilitate technological and economical research on this subject. Some of the technological problems
mentioned below with using alcohol fuels can be overcome with proper design optimization and
materials selection. Today ethanol is added in small amounts (10 percent ethanol, 90 percent
gasoline) in 7.5 percent of the gasoline used in the U.S. Methanol, however, is used simply as a
gasoline blending agent. Table 4-3 shows some of the important chemical properties for gasoline,
diesel, ethanol and methanol; and it helps understand the advantages and disadvantages discussed
below.96
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Final Regulatory Impact Analysis
Table 4-i
Fuel Properties
Fuel
Heating Value
[MJ/kg]
Reid Vap. Pres.
100°F [psi]
Stoichiometric
A/F ratio
Octane
(research)
Gasoline
43.5
7-13
14.6
91-100
No. 2 Diesel
43
0.04
14.6
N/A
Ethanol
27
2.5
9
111
Methanol
20.1
4.6
6.4
112
a. Ethanol
Most of the ethanol produced in the U.S. comes from the wet or dry-milling of corn. Ethanol
has a high octane number, which, in addition to helping to reduce knocking, allows the use of higher
compression ratios and results in higher thermal efficiencies. Its lower vapor pressure, when
compared to gasoline, helps produce less evaporative emissions (may not be true for all ethanol-
gasoline blends), but increases cold starting difficulties. Environmentally, neat ethanol has some
advantages over gasoline. Emission studies have reported an insignificant production of benzene and
carcinogenic substances such as 1,3 butadiene and polycyclic organic matter (POM). Furthermore,
carbon dioxide production, in grams per mile, can be reduced as much as 22 percent by using 100
percent ethanol.97 The combustion of ethanol occurs at smaller air-to-fuel ratios, which, combined
with lower flame temperature, helps reduce NOx and CO. However, the use of higher compression
ratios could negate these benefits by increasing these emissions. Although aldehyde formation is
always a concern when using alcohol fuels, the formation of formaldehyde in ethanol-fueled engines
is not as high as in methanol-fueled engines. However, acetaldehyde formation is a concern from
ethanol-fueled vehicles prior to the catalyst being heated to its operating temperature.
Some technological difficulties need to be addressed before ethanol can be used efficiently
as a transportation fuel. First, because it has just 67 percent the energy content of gasoline, ethanol
gives less miles per gallon than both gasoline and diesel fuels. In addition, cold starting can be
specially difficult in compression-ignition engines due to ethanol's low cetane number.98
Currently, the best example of wide use of ethanol is in Brazil, where 60 percent of the
vehicles use a 78 percent gasoline, 22 percent ethanol blend; and the other 40 percent uses a neat
thanol blend (95 percent ethanol, 5 percent water).99 In the U.S. ethanol blends (85 percent ethanol,
15 percent gasoline) are scarcely available in the upper Midwest, Washington, D.C., and California.
Today about 400 vehicles fueled with these blends are used.100
b. Methanol
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Chapter 4: Technological Feasibility
Methanol is another alcohol used as an alternative fuel. Methanol's high octane number, like
ethanol's, would allow engineers to design an engine with a higher compression ratio and thus
greater efficiency. Methanol does not produce significant amounts of air toxics when compared to
gasoline-fueled vehicles, but C02 and HC can be much higher than diesel fuels. The use of methanol
fuel could help reduce NOx and PM emissions, as evidenced by recent studies.101
Methanol does have some technical difficulties. Aldehyde formation is a concern because
of the relatively high levels of formaldehyde found during the combustion of methanol. Other
problems with using methanol are its low heating value, its invisible flame and toxicity. Methanol
fuel contains less energy per unit mass than ethanol, gasoline and diesel.102 However this
disadvantage can be reversed by designing a smaller and lighter engine, with a higher compression
ratio, with similar efficiency and capable of providing more miles per gallon. During combustion
methanol gives off an invisible flame that can be a major safety issue; but it can be solved by using
additives that will make the flame visible or through the use fire-suppression equipment. Also,
corrosion-resistant materials are necessary in the fuel system design.
Presently, methanol fueled vehicles are available in the U.S. Two car manufacturers are
offering flexible-fueled vehicles capable of using a variety of methanol blends (up to 85 percent
methanol, 15 percent gasoline). Moreover, one heavy-duty diesel engine manufacturer has made
available a model capable of using 100 percent methanol fuel.103
C. Alternative Power Sources
Vehicles that produce essentially no ground level exhaust and evaporative emissions during
operation are known as Zero Emission Vehicles (ZEV). Although the internal combustion engine
is presently the most practical power source for a heavy-duty vehicle, it cannot meet zero emissions.
Two ZEV designs that have been investigated for heavy-duty applications are vehicles powered by
electric batteries and by fuel cells. ZEVs have emissions associated with their power source (i.e.
power station for electric vehicle); however, these emissions may be generally lower than an internal
combustion engine for the same work and are often produced outside of urban areas.
1. Electric vehicles
Another possible power source for heavy-duty vehicles is the electric vehicle concept.
Electric vehicles use rechargeable batteries to drive an electric motor that powers the vehicle. Power
normally lost to braking is usually collected, and routed back to the battery, by using a generator
load to slow the vehicle. Although many types of batteries are being developed, only lead-acid and
nickel-cadmium (Ni-Cd) batteries are commercially available at this time. Nickel-iron (Ni-Fe)
batteries should be available in the near term. A lead-acid battery is capable of about 500 charges
(one per day) with a peak power output 180 W/kg, an energy density of 36 W-nr/kg, and a cost of
under $150/kW-hr. The Advanced Battery Consortium is targeting a battery design capable of
operating 50-100,000 miles with a peak power output of 150-300 kW, an energy density of 100-200
W-hr/kg, and a cost of $100-150/kW-hr.104 The main limitations on electric vehicles are the high
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Final Regulatory Impact Analysis
costs and weight and the short lives of today's battery designs.
Several programs are underway to bring electric vehicles to the market. To help combat the
severe pollution problem in Mexico City, one university is developing a 30-person shuttle bus design
that will operate wholly on batteries.105 In California, several electric buses are already in use.
These buses were developed under a program started in 1992 by the Federal Transit Administration.
Even when power plant emissions are considered in southern California, these vehicles are 90 to
97 percent cleaner than diesel-fueled buses and 50 percent cleaner than alternative-fueled buses. In
this case, most of the electricity is generated from natural gas or hydro-electric power plants. Energy
consumption costs for electric buses are estimated at 5 to 6 cents a mile, which is much lower than
the estimated 10 to 12 cents a mile for diesel-fueled buses.106
2. Fuel cells
A fuel cell is a power plant that consumes hydrogen through a reaction with air and converts
the chemical energy directly to electrical energy. Hydrogen can be carried on-board the vehicle or
derived from other fuels such as natural gas, alcohols, or other hydrocarbon fuels. Because fuel cells
are not subject to the heat loss inefficiencies associated with internal combustion engines, they are
about twice as energy efficient as internal combustion engines. Fuel cells remove energy from the
fuel without chemical combustion; therefore, they are much cleaner than internal combustion
engines. In addition, fuel cell systems are relatively quiet power plants because they have only a few
moving parts.107
The capability of a fuel cell to provide the sole source of electric power for a ZEV bus was
demonstrated in 1993. This system used a proton exchange membrane and was fueled with
compressed hydrogen gas. Hydrogen was used in the fuel cell because it is the only fuel that can be
used in a fuel cell with zero emissions. (Hydrogen burned in an internal combustion engine would
still produce some NOx).108 Even with a fuel cell powered by methanol, CO and NOx emissions are
on the order of 30 times lower than the 1998 Federal emission standards. For a methanol fueled
application, a reformer reacts methanol with water to produce hydrogen. The hydrogen is used for
the anode in a phosphoric acid fuel cell.109
VI. Conclusion
This chapter identifies technologies that can be used to achieve at least 2.4 g/bhp-hr NMHC
plus NOx levels by 2004 from heavy-duty diesel engines while still meeting the applicable PM
standard of 0.1 g/bhp-hr (0.05 g/bhp-hr for urban buses). Currently, CO levels are well below 1998
Federal emission standards and are expected to remain so even as HC and NOx levels are lowered.
For heavy-duty diesel engines, emission control technologies such as exhaust gas
recirculation, advanced fuel injection, and charge air pressure and temperature control have been
shown to be capable of reducing NMHC plus NOx to 2.4 g/bhp-hr. At this time, PM levels increase
above 0.1 g/bhp-hr at these low NMHC and NOx calibrations. However, PM may be brought back
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Chapter 4: Technological Feasibility
to 1998 levels through the continued use of aftertreatment or through further advances in currently
developed technology. Aftertreatment devices are being developed for both PM and NOx reduction.
Manufacturers are expected to use some combination of engine and aftertreatment controls to meet
the 2.4 g/bhp-hr NMHC plus NOx level without increasing PM emissions.
The following chapter distinguishes between primary and secondary technologies for diesel
engines. Primary technologies are those control technologies that EPA believes manufacturers will
use specifically to meet the requirements of this rule. Secondary technologies are those that either
would be used in the future for reasons other than emission control or are not predicted to be the
most cost-effective strategies. Primary technologies include hot and cold EGR, combustion
optimization, and fuel injection improvements. Fuel injection improvements have benefits that go
beyond control of NOx emissions, but can be considered a primary technology to the extent that they
are used to comply with the emission standards finalized today. A partial list of secondary
technologies follows: decreased fuel consumption, variable geometry turbocharger, converting to
four valves per cylinder, variable valve timing, oxidation catalyst improvements, and lean NOx
catalysts.
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Final Regulatory Impact Analysis
CHAPTER 4 REFERENCES
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Strategies for DI Diesel Engines," SAE Paper 920470, 1992.
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Paper 920695,1992.
3. Durnholz, M., Eifler, G., Endres, H., "Exhaust-Gas Recirculation - A Measure to Reduce
Exhaust Emission of DI Diesel Engines," SAE Paper 920725, 1992.
4. Bazari, Z., French, B., "Performance and Emissions Trade-Offs for a HSDI Diesel Engine
- An Optimization Study," SAE Paper 930592, 1993.
5. See endnote 4—SAE 930592
6. See endnote 1—SAE 920470
7. Konno, M., Chikahisa, T., Murayama, T., "Reduction of Smoke and NOx by Strong
Turbulence Generated During the Combustion Process in D.I. Diesel Engines," SAE Paper
920467, 1992.
8. Yang, M., Sorenson, S., "Survey of the Electronic Injection and Control of Diesel
Engines," SAE Paper 940378, 1994.
9. See endnote 1—SAE 920470
10. See endnote 4—SAE 930592
11. Dev, P., "Emerging Technologies for Diesel Engines," SAE Seminars, I.D. #94011, 1994.
12. Pilley, A., Noble, A., Beaumont, A., Needham, A., Porter, B./"Optimization of Heavy-
Duty Diesel Engine Transient Emissions by Advanced Control of a Variable Geometry
Turbocharger," SAE Paper 890395, 1989.
13. See endnote 4—SAE 930592
14. See endnote 1—SAE 920470
15. See endnote 4—SAE 930592
16. Pierpont, D., Reitz, R., "Effects of Injection Pressure and Nozzle Geometry on D.I. Diesel
Emissions and Performance," SAE Paper 950604, 1995.
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Chapter 4: Technological Feasibility
17. Minami, T., Takeuchi', K., Shimazaki, N.. "Reduction of Diesel Engine NOx Using Pilot
Injection," SAE Paper 950611, 1995.
18. Piepont, D., Montgomery, D., Reitz, R., "Reducing Paniculate and NOx Using Multiple
Injections and EGR in a D.I. Diesel," SAE Paper 950217, 1995.
19. See endnote 1—SAE 920470
20. See endnote 18—SAE 950217
21. See endnote 1—SAE 920470
22. Uchida, N., Daisho, Y., Saito, T., Sugano, H., "Combined Effects of EGR and
Supercharging on Diesel Combustion and Emissions," SAE Paper 930601, 1993.
23. Cadman, W., Johnson, J., "The Study of the Effect of Exhaust Gas Recirculation on
Engine Wear in a Heavy-Duty Diesel Engine Using Analytical Ferrography," SAE Paper
860378, 1986.
24. Yoshikawa, H., Umehara, T., Kurkawa, M., Sakagami, Y., Ikeda, T., "The EGR System
for Diesel Engine Using a Low Voltage Soot Removal Device," SAE Paper 930369, 1993.
25. Khalil, N., Levendis, Y., Abrams, R., "Reducing Diesel Particulate and NOx Emissions
via Filtration and Particle-Free Exhaust Gas Recirculation," SAE Paper 950736, 1995.
26. Larsen, C., Oey, F., Levendis, Y., "An Optimization Study on the Control of NOx and
Particulate Emissions from Diesel Engines," SAE Paper 960473, 1996.
27. Baert, R., Beckman, D., Verbeek, R., "New EGR Technology Retains HD Diesel
Economy with 21st Century Emissions," SAE Paper 960848, 1996.
28. Fleet Owner, "Hardware Report: What's new in... Bypass Filtration," magazine article,
January 1997.
29. Akiyama, M., Sakai, H., Yamada, T., Kanesaka, H., "An Elegant Solution for Vehicular
Diesel's Emission and'Economy - Hybrid EGR System," SAE Paper 960842, 1996.
30. Montgomery, D., Reitz, R., "Six-Mode Cycle Evaluation of the Effect of EGR and
Multiple Injections on Particulate and NOx Emissions from a D.I. Diesel Engine," SAE Paper
960316, 1996.
31. See endnote 16—SAE 950604
32. Tullis, S., Greeves, G., "Improving NOx Versus BSFC with EUI 200 Using EGR and
Pilot Injection for Heavy-Duty Diesel Engines," SAE Paper 960843, 1996.
77
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Final Regulatory Impact Analysis
33. See endnote 1—SAE 920470
34. See endnote 22—SAE 930601
35. Needham, J., Doyle, D., Nicol, A., "The Low NOx Truck Engine," SAE Paper 910731,
1991.
36. See endnote 1—SAE 920470
37. Havenith, C., Needham, J., Nicol, A., Such, C., "Low Emission Heavy Duty Diesel
Engine for Europe," SAE Paper 932959, 1993.
38. See endnote 18—SAE 950217
39. See endnote 27—SAE 960848
40. Navistar, "2004/ULEV Emissions Demonstration," Presentation to EPA, June 25, 1996.
41. Acurex Environmental Corporation, "Technical Feasibility of Reducing NOx and
Particulate Emissions from Heavy-Duty Engines," prepared for California Air Resources Board,
April 30, 1993.
42. Fennema, R. (editor), "Fuel Systems and Emission Controls; 2nd edition," Chek-Chart
Publications, 1988.
43. Code of Federal Regulations, Title 40, Sections 86.085-11(c).
44. U.S. Environmental Protection Agency, "Diesel Crankcase Emissions Characterization,"
Report No. EPA-460/3-77-016, 1977.
45. Urban, C., "Measurement of Engine Crankcase Emissions," Southwest Research Institute,
Final Report Prepared for the Engine Manufacturers Association, 1993.
46. Giannoti, H., Dickson, G., "The Control of Crankcase Emissions," 1993.
47. Hower, M., Mueller, R., Oehlerking D,, Zielke, M., "The New Navistar T444E Direct-
Injection Turbocharged Diesel Engine," SAE Paper 930269, 1993.
48. Conversation with Ricardo North America Inc., July 1995.
49. See endnote 46—Giannoti and Dickson
50. Johnson, J., Bagley, S., Gratz, L., Leddy, D., "A Review of Diesel Particulate Control
Technology and Emissions Effects - 1992 Horning Memorial Award Lecture", SAE Paper
940233, 1994.
78
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Chapter 4: Technological Feasibility
51. Meeting between EPA and the Manufacturers of Emission Controls Association, April
1995.
52. Voss, K., Bulent, Y., Hirt, C, and Farrauto, R., "Performance Characteristics of a Novel
Diesel Oxidation Catalyst", SAE Paper 940239, 1994.
53. See endnote 50—SAE 940233
54. Ichikawa, Y., Yamada, S., Yamada, T., "Development of Wall-Flow Type Diesel
Particulate Filter System with Efficient Reverse Pulse Air Regeneration", SAE Paper 950735,
1995.
55. Reported at the Department of Energy Annual Automotive Technology Development
Contractors' Coordination Meeting, October 24, 1994.
56. Meeting between EPA and Johnson-Matthey, December, 9, 1994.
57. See endnote 25—SAE 950736
58. Feeley, Deeba, Farrauto, "Abatement of NOx from Diesel Engines: Status and Technical
Challenges," SAE Paper 950747, 1995.
59. Held, Konig, Richter, Puppe, "Catalytic NOx Reduction in Net Oxidizing Exhaust Gas,"
SAE Paper 900496, 1990.
60. Muramatsu, Abe, Furuyama, Yoshida, "Catalytic Reduction of NOx in Diesel Exhaust,"
SAE Paper 930135, 1993.
61. See endnote 58—SAE 950747
62. See endnote 59—SAE 900496
63. Engler, Leyrer, Lox, Ostgathe, "Catalytic Reduction of NOx with Hydrocarbons Under
Lean Diesel Exhaust Gas Conditions," SAE Paper 930735, 1993.
64. Yoshida, Makkio, Sumiya, Muramatsu, Helferich, "Simultaneous Reduction of NOx and
Particulate Emissions from Diesel Engine Exhaust," SAE Paper 892046, 1989.
65. See endnote 59—SAE 900496
66. See endnote 58—SAE 950747
67. Iwasaki, Ikeya, Itoh, Itoh, Yamaguchi, "Development & Evaluation of Catalysts to
Remove NOx from Diesel Engine, Exhaust Gas," SAE Paper 950748,1995.
68. See endnote 58—SAE 950747
79
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Final Regulatory Impact Analysis
69.
See endnote
70.
See endnote
71.
See endnote
72.
See endnote
73.
See endnote
74.
See endnote
75.
See endnote
76.
See endnote
77.
See endnote
78.
See endnote
58—SAE 950747
67—SAE 950748
58—SAE 950747
63—SAE 930735
58— SAE 950747
59—SAE 900496
58—SAE 950747
63—SAE 930735
58—SAE 950747
58—SAE 950747
79. Smedler, Ahlstrom, Fredholm, Frost, Loof, Marsh, Walker, Winterborn, "High
Performance Diesel Catalysts for Europe Beyond 1996," SAE Paper 950750,1995.
80. See endnote 67—SAE 950748
81. See endnote 58—SAE 950747
82. See endnote 58—SAE 950747
83. See endnote 7—SAE 920467
84. Shahed, S., Steiber, J., Olikara, C., "The Emissions Challenge for Heavy Duty Diesel
Engines," Presentation by Southwest Research Institute to the EPA on March 2, 1995.
85. Bykowski, Grothaus, Fanick, "Diesel Particulate/NOx Exhaust Aftertreatment Using
Plasmas or Corona Discharges," Southwest Research Institute Proposal NO. 08-161187, June,
1994.
86. 40 CFR 80.29
87. Final Rule, August 21, 1990, 55 FR 34120.
88. Ullman, T., Mason, R., Montalvo, D., "Study of Fuel Cetane Number and Aromatic
Content Effects on Regulated Emissions from a Heavy-Duty Diesel Engine," Prepared for CRC
(Project VE-1), September 1990.
80
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Chapter 4: Technological Feasibility
89. Spreen, K., Ullman, T., Mason, R., "Effects of Fuel Oxygenates, Cetane Number, and
Aromatic Content on Emissions from 1994 and 1998 Prototype Heavy-Duty Diesel Engines,"
Prepared for CRC (Project VE-10), May 1995.
90. Colorado Institute for Fuels and High Altitude Engine Research, "Research Report:
Effects of Aromatics and Cetane Enhancement on Emissions from a Detroit Diesel Series 60,"
June 1994.
91. Rosenthal, M., Bendinsky, T., "The Effects of Fuel Properties and Chemistry on the
Emissions and Heat Release of Low-Emission Heavy Duty Diesel Engines," SAE Paper 932800,
1993.
92. Conversation with Detroit Diesel Corporation, October 1994.
93. Conversation with Cummins Engine Company, Inc., October 1994.
94. Conversation with Hercules, October 1994.
95. Hupperich, P., Diirnholz, M., "Exhaust Emissions of Diesel, Gasoline and Natural Gas
Fuelled Vehicles," SAE Paper 960857, 1996.
96. Alternative Fuels Committee of the Engine Manufacturers Association, "A Technical
Assessment of Alcohol Fuels," SAE Paper No. 820261, 1982.
97. U.S. Environmental Protection Agency, "Analysis of the Economic and Environmental
Effects of Ethanol as an Automotive Fuel," EPA Report 420R90102, 1990.
98. Sinor, J., Bailey, B., "Current and Potential Future Performance of Ethanol Fuels," SAE
Paper 930376, 1993.
99. Black, F., "An Overview of the Technical Implications of Methanol and Ethanol as
Highway Motor Vehicle Fuels," EPA/600/D-91/076, 1991.
100. Argonne National Laboratory, "Alternative Fuels: Taking an Alternative Route," 1994.
101. Wang, W., Gaotam, M., Sun, X., Bata, R., Clark, N., Palmer, G., Lyons, D., "Emissions
Comparisons of Twenty-Six Heavy Duty Vehicles Operated on Conventional and Alternative
Fuels," SAE Paper 932952, 1993.
102. US. Environmental Protection Agency, "Analysis of the Economic and Environmental
Effects of Methanol as an Automotive Fuel," EPA Report 420R89100, 1989.
103. See endnote 100—Argonne National Laboratory
104. Washington State Energy Office, "Electric Vehicles: An Alternative Fuels Vehicle,
Emissions and Refueling Infrastructure Technology Assessment," June, 1993.
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Final Regulatory Impact Analysis
105. Romero, A., Chicurei, R., Soto, C., "Urban Electric Vehicle for Public Transportation,"
SAE Paper 931795, 1993.
106. Nanda, D., "Battery Powered Electric Bus Industry Technology Status and Future," SAE
Paper 931826,1993.
107. Patil. P., "Fuel Cell Development for Light-Duty and Heavy-Duty Vehicle Applications,"
Annual Automotive Technology Development Contractors' Coordination Meeting, October
1993.
108. Howard, P., Greenhill, C., "Ballard PEM Fuel Cell Powered ZEV Bus," SAE Paper
931817,1993.
109. Kaufman, A., Christ, A., "Phosphoric Acid Fuel Cell Bus Development," Annual
Automotive Technology Development Contractors' Coordination Meeting, October 1993.
82
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Chapter 4: Technological Feasibility
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Final Regulatory Impact Analysis
84
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Chapter 5: Economic Impact
CHAPTER 5: ECONOMIC IMPACT
I. Lead Time and R&D
In previous rules to set heavy-duty engine emission standards, EPA has typically allowed
engine manufacturers about four years of preproduction lead time. This four-year lead time, the
period called for in the Clean Air Act, has given manufacturers sufficient opportunity to complete
the research, development, retooling, and certification efforts necessary to comply with promulgated
emission standards. The requirements for the 2004 model year do not follow this pattern. The
Statement of Principles and the Advance Notice of Proposed Rulemaking gave the engine
manufacturers a good idea of the level of the emission standards and other related requirements a
full eight years before 2004. This relatively long lead time has significant positive implications for
the economic impact of the new requirements. As discussed in Chapter 4, diesel engine
manufacturers are expected to meet the proposed requirement using a combination of control
strategies and techniques aimed at reducing NOx and HC in-cylinder, rather than relying on the
development of aflertreatment technologies. This approach requires a significant amount of up-front
R&D effort to develop and evaluate the various fuel and air control strategies and techniques, which
could potentially help reduce emissions. Eight years of lead time provides enough time to plan and
conduct a comprehensive, efficient, and orderly R&D program including basic research on the fuel
and air control strategies and techniques under consideration and the application of the fruits of these
efforts to the individual engine models. This lead time allows for the efficient application of this
technology while maintaining (if not improving) engine durability and fuel consumption
characteristics. Thus, as will be discussed below, R&D is a significant factor in developing and
optimizing the engine control approaches; toward this end, EPA has identified significant resources
for R&D as part of the overall cost of control.
Changes to heavy-duty engine emission standards for the 1998 model year provide an
intermediate step toward compliance with the 2004 model year standards. All 1998 model year
heavy-duty vehicles must meet a 4 g/bhp-hr NOx standard. Some fleet vehicles must meet a
3.8 g/bhp-hr NOx + NMHC standard beginning the same year. To comply with these standards,
manufacturers may implement some design improvements needed for the 2004 model year engines.
Complying with these intermediate standards gives manufacturers a milestone for making these
improvements and provides them the opportunity to get information on in-use operating
characteristics of the selected technologies at that stage in their development. The learning from this
early deployment of emission control technologies can in turn be factored into the development
process for further refinement to comply with 2004 model year standards. A difficulty in estimating
the cost of complying with these standards lies in the uncertainty in precisely defining a baseline
package of emission control technology for meeting the 1998 model year standards.
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Final Regulatory Impact Analysis
II. Methodology
Using the technical information in Chapter 4, EPA identified packages of technologies that
diesel engine manufacturers could use to meet the emission standards. To assist EPA in this
economic analysis, ICF, Incorporated and Acurex Environmental Corporation conducted a study of
the potential costs of a wide variety of technologies. While the following analysis projects a
relatively uniform emission control strategy.for designing the different categories of engines, this
should not suggest that a single combination of technologies will be used by all manufacturers. In
fact, depending on basic engine emission characteristics, EPA expects that control technology
packages will gradually be fine-tuned to each application. Furthermore, EPA expects manufacturers
to use averaging, banking, and trading programs as a means to deploy varying degrees of emission
control technologies on different engines. EPA nevertheless believes that the projections presented
here provide a cost estimate representative of the different approaches manufacturers may ultimately
take.
Costs of control include variable costs (for incremental hardware costs, assembly costs, and
associated markups) and fixed costs (for tooling, R&D, and certification). Variable costs are
marked up at a rate of 29 percent to account for manufacturers' overhead and profit.1 For
technologies sold by a supplier to the engine manufacturers, an additional 29 percent markup is
included for the supplier's overhead and profit. Fixed costs for R&D would be incurred over the
seven-year period from 1996 through 2002, while tooling and certification costs are incurred one
year ahead of initial production. Fixed costs are increased by seven percent for every year before
the start of production to reflect the time value of money, and are then recovered with a five-year
amortization at the same rate. The analysis also includes consideration of lifetime operating costs
where applicable.
Projected costs were derived for four service classes of heavy-duty diesel vehicles, as
depicted in Table 5-1. The cost for each technology applied to urban buses is the same as the cost
of that technology when applied to heavy heavy-duty vehicles, unless otherwise specified.
III. Technologies for Meeting the 2004 Standards
The following discussion provides a description and estimated costs for those technologies
EPA projects will be needed to comply with the new emission standards. It is difficult to make a
distinction between technologies needed to reduce NOx emissions for compliance with 2004 model
year standards and those technologies that offer other benefits for improved fuel economy and engine
performance or for better control of HC or particulate emissions. EPA believes thai without 2004
model year standards, manufacturers would continue research on and eventually deploy many
technological upgrades to improve engine performance or more cost-effectively control emissions.
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Table 5-1
Service Classes of Heavy-Duty Vehicles
Service Class
Vehicle Class
GVWR (lbs.) ]
Light
2B-5
8,500- 19,500 |
Medium
6-7
19,501 -33,000 1
Heavy
8
33,001 + |
Urban Bus
—
1
Accordingly, EPA believes that a small set of technologies represent the primary changes
manufacturers must make to meet the 2004 model year standards. Other technologies applied to
heavy-duty engines, before or after implementation of new emission standards, will make smaller
contributions to controlling NOx or HC emissions and are therefore considered secondary
improvements for this analysis. In this category are design changes such as improved oil control,
variable-geometry turbochargers, optimized catalyst designs, and variable-valve timing. Lean NOx
catalysts are also considered secondary technologies in this analysis, not because NOx control is an
incidental benefit, but because it appears unlikely that they will be part of 2004 model year
technology paskages. Modifications to fuel injection systems will also continue independently of
new standards, though some further development with a focus on reducing NOx or HC emissions
would be evaluated. While a few engines must reduce HC emission levels, EPA expects the
combination of technologies selected for meeting NOx and particulate emission standards to be
sufficient for adequate control of HC emissions.
The technology packages include two sets of projections. First, the baseline technology
packages represent a projection of the strategies expected from manufacturers to meet the 1998
emission standards and to improve their engine designs generally. Specification of these
technologies is based on an observation of current trends in heavy-duty engine technology and a set
of technical judgments about the most likely control steps needed to meet the 1998 model year
emission standards.
Second, several technological improvements.are projected for complying with the proposed
2004 model year emission standards. Selecting this package of technologies requires extensive
engineering judgment. The fact that manufacturers have nearly a full decade before implementation
of the proposed standards ensures that the technologies used to comply with the proposed emission
standards will develop significantly before reaching production. This ongoing development will lead
to reduced costs in three ways. First, research will lead to enhanced effectiveness for individual
technologies, allowing manufacturers to use simpler packages of emission control technologies than
we would predict given the current state of development. Similarly, the continuing effort to improve
the emission control technologies will include innovations that allow lower-cost production. Finally,
manufacturers will focus research efforts on any potential drawbacks, such as increased fuel
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Final Regulatory Impact Analysis
consumption or maintenance costs, attempting to minimize or overcome any negative effects.
Cost estimates based on these projected technology packages would increase the cost of
engines in the 2C9' model year. Costs in subsequent years would be reduced by several factors.
After manufacturers certify engines to meet new emission standards, they will continue to pursue
innovations that reduce the cost of compliance, either by improving the effectiveness of control
technologies, or by reducing the cost of manufacturing and assembling the hardware. Also, current
research activities include development of several technologies not included in this analysis. Further
improvement of some of these longer range technologies may ultimately provide the opportunity to
meet emission standards at a lower overall cost. EPA has attempted to quantify the cost savings
associated with this ongoing development, as described in Section V below.
The baseline control technologies projected for engines meeting 1998 emission standards
include technologies that contribute directly to lower NOx emissions and a variety of engine
improvements with only secondary benefits for NOx control. The baseline scenario includes full
utilization of electronic controls and unit injectors. Except for urban bus engines, one-third to one-
half of diesel engines are expected to include unit injectors designed to operate independently of
engine speed; one example of such an injector is the Hydraulically-activated, Electronically-
controlled Unit Injector (HEUI), which is currently manufactured for several Caterpillar and Navistar
engine models. Also, all the engine models will likely have some basic manipulation of the fuel
injection profile (for "rate shaping"). Variable-geometry turbochargers are expected for several
engine lines as manufacturers aim for better performance and fuel economy. Light and medium
heavy-duty engines may be modified to further reduce the contribution of lubricating oil to
particulate emissions. Manufacturers may also pursue variable-valve timing or upgrade to four
valves per cylinder for improved engine performance.
A combination of primary technology upgrades are anticipated for the 2004 model year.
Achieving very low NOx emissions will require basic research on reducing in-cylinder NOx and HC.
Modifications to basic engine design features can improve intake air characteristics and distribution
during combustion. Manufacturers are also expected to use upgraded electronics and advanced fuel-
injection techniques and hardware to modify various fuel injection parameters for higher pressure,
further rate shaping, and some split injection. EPA also expects that many engines will incorporate
a moderate degree of cooled exhaust gas recirculation. The costs of these individual technologies
are considered in the following paragraphs and summarized in Tables 5-2. The costs of secondary
improvements are also discussed, but are not included in the calculation of total vehicle costs, since
it is not expected that these will be needed for compliance with the proposed emission standards.
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Chapter 5: Economic Impact
Tables 5-2
2004 Model Year Cost Estimates
Light Heavy-Duty Diesel Vehicles
Item
Fraction
Fixed
Cost
Variable
Cost
Operating
Cost
Cooled EGR
100%
63
140
7
Combustion Optimization
100%
20
0
0
Improved fuel injection
25%
2
31
0
Certification
100%
2
0
0
Total
—
87
170
7
Medium Heavy-Duty Diesel Vehicles
Item
Fraction
Fixed
Cost
Variable
Cost
Operating
Cost
Cooled EGR
100%
119
154
62
Combustion optimization
100%
50
0
0
Improved fuel injection
50%
9
58
0
Certification
100%
7
0
0
Total
—
185
212
62
Heavy Heavy-Duty Diesel Vehicles
Item
Fraction
Fixed
Cost
Variable
Cost
Operating
Cost
Cooled EGR
100%
119
216
131
Combustion optimization
100%
50
0
0
Improved fuel injection
50%
9
115
0
Certification
100%
8
0
0
Total
—
186
281
131
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Final Regulatory Impact Analysis
Tables 5-2, continued
Urban Buses
Fixed
Variable
Operating
Item
Fraction
Cost
Cost
Cost
Cooled EGR
100%
119
174
127
Combustion optimization
100% '
50
0
0
Improved fuel injection
50%
6
49
0
Certification
100%
8
0
0
Total
—
183
223
127
A. Primary Technologies
The following discussion presents the projected costs of the primary technological
improvements expected for complying with the proposed emission standards, first for fixed costs,
then for hardware and operating costs of the individual technologies.
The cost analysis anticipates an extensive ongoing research program to develop these
technologies. For the cost analysis, R&D expenditures total nearly $40 million per year over a
seven-year period beginning in 1996. These costs are discounted at a seven percent rate to reflect
the time value of money. R&D costs account for over 90 percent of the total fixed costs per engine
detailed in Tables 5-2.
Retooling is another fixed cost factored into the analysis. The net present value in 1995 of
the expected retooling costs is about $25 million. Retooling costs will be incurred about one year
before initial production and are discounted accordingly.
Manufacturers will also incur costs for certifying the range of engine families to the proposed
emission standards. EPA previously developed a detailed methodology for calculating certification
costs.2 Adjusting those figures to account for inflation results in an estimated certification cost of
$230,000 per engine family. Because certification costs will be incurred on average one year before
the beginning of production, the calculated cost is increased by seven percent. The calculated
certification costs for heavy-duty diesel engines can be rounded up to $23 million. Distributing
those costs across the different engine categories, amortizing the costs over five yeare, and dividing
by the number of projected 2004 model year sales for each category results in per-engine costs
between $2 and $8 for each category of heavy-duty diesel vehicles.
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Chapter 5: Economic Impact
1. Exhaust gas recirculation
Exhaust gas recirculation (EGR) may represent the biggest area of technology development
enabling manufacturers to achieve the targeted NOx emission levels. Unlike the other technological
developments, which are largely evolutionary, introduction of EGR would be a step change in the
design of heavy-duty diesel engines. While much research remains to optimize EGR systems for
maximum NOx-control effectiveness with minimum negative impacts on performance and
durability, current developments show great promise for substantial emission-control improvements
with EGR systems.
Manufacturers have several design options for developing a system for exhaust gas
recirculation (EGR). Current designs seem to be moving toward cooled EGR systems with varying
levels of recirculation, ranging from roughly 50 percent of intake air volume at idle to 5 percent or
less near peak power. Recirculation rates during intermediate speed and load operation will be
carefully tailored to consider the needs for engine performance and emission control. With the low
level of engine-out particulate matter, this degree of recirculation will not require filtration of the
recirculated exhaust gases. EGR cooling is expected to come from a heat exchanger that relies on
the engine coolant coming out of the engine to draw heat from the recirculated exhaust gases.
Engine designs will likely route exhaust gases into the engine's air intake downstream of the
turbocharger inlet. Pressure pulses in the exhaust may be sufficient to force the exhaust gases into
the intake manifold, though simple devices such as a venturi or a flow-restricting orifice may serve
to improve the pressure differential across the EGR valve. For maximum control, a pump could be
installed to enable varying flow rates in any operating conditions. Development of any of these
types of EGR depend on electronics to control the airflow through the EGR valve. Though a variety
of design choices are yet to be decided, the basic system design seems to be getting clearer; this
analysis presents the estimated cost for this EGR system.
The cost to manufacturers of adding the hardware for a cooled EGR system ranges from $140
to $220 per engine. Factoring in the fixed costs and the appropriate markups results in an increased
purchase price of $203, $273, $335, and $293 for light, medium, and heavy heavy-duty diesel
vehicles, and urban buses, respectively.
2. Combustion optimization
Manufacturers can make a variety of changes to the basic engine design that do not require
additional components. Programming the engine's electronic controls, optimizing intake air
characteristics and distribution, and making changes to piston bowl shape, the compression ratio,
and the injection timing strategy add little or no variable cost, but require significant expenses for
R&D and retooling. Total costs for these improvements are estimated at $5 million per engine line.
For the different classes of vehicles, this translates to an incremental cost between $20 and $50 per
engine.
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Final Regulatory Impact Analysis
3. Fuel System Upgrades
Manufacturers are expected to improve their fuel injection systems by increasing fuel
injection pressure, improving spray patterns, and adding rate shaping or split injection capability;
however, much of this improvement is expected to occur independently of2004 model year emission
standards.
For cam-driven electronic unit injection systems, the expected fuel system improvements will
require stronger and better performing fuel injectors and solenoids. Advanced systems such as
Caterpillar's Hydraulically-Activated Electronically-controlled Unit Injection (HEUI) technology
require various reinforcements and better high-pressure oil pumps and solenoid valves. Common
rail injection systems are similar enough to HEUI designs that the cost estimate would mirror that
for HEUI systems.
Incremental costs for this set of fuel injector improvements are roughly proportional to the
number of cylinders in an engine. Light heavy-duty vehicles, typically equipped with eight-cylinder
engines, have an estimated total cost of about $130 per engine, which is an average for the different
hardware configurations. Medium and heavy heavy-duty vehicles, with six-cylinder engines, would
have a cost between $ 130 and $ 150 per engine. Urban buses, currently equipped with four-cylinder
engines, have the lowest estimated total cost of about $110.
4. Technology package costs
The estimated incremental costs of these primary technologies depend on several judgments
about which technologies will be used. For example, identifying the degree of EGR flow that will
be needed to meet emission standards is difficult. If manufacturers need a higher EGR flows than
estimated here, hardware costs will increase, more R&D time will be required, and there will be a
greater potential for increased operating expenses for fuel consumption and maintenance.
EPA believes it is not appropriate to assign the full cost of fuel system upgrades to the
proposed emission standards. Much of the anticipated improvements will come independently of
the 2004 model year standards and any remaining system improvements for 2004 and later model
year vehicles will provide benefits beyond lower NOx emissions. In an effort to properly assess the
cost of the fuel system upgrades, EPA estimates for light heavy-duty vehicles that 25 percent of the
fuel system cost increase should be allocated to the proposed standards. For all other engines, half
the fuel system cost increase is attributed to the proposed standards. The lower estimate for light
heavy-duty, vehicles reflects the lower sensitivity of these engines to fuel economy-concerns, i.e.,
manufacturers will likely resort to less costly hardware improvements that may result in small
increases in fuel consumption.
The resulting calculation of total incremental cost for the set of primary technologies,
summarized in Tables 5-2, shows the expected increase in purchase price due to the proposed
emission standards. Projected cost increases are $258, $397, $467, and $406 for light, medium, and
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Chapter 5: Economic Impact
heavy heavy-duty vehicles, and urban buses, respectively.
To test the sensitivity of these estimates, EPA calculated the cost increase assuming that
heavy heavy-duty vehicles would need high-flow EGR systems. This would increase hardware costs
by about $80 (retail price equivalent) and operating costs by about $800 (net present value at the
point of sale). The affect of increasing fuel consumption, in this case by 1 percent, is clearly great
enough that manufacturers would seek alternative engineering solutions to comply with emission
standards to minimize the cost impacts.
B. Operating Costs
EGR has the potential, if not developed and implemented properly, to increase operating
costs, either by increasing fuel consumption or requiring additional maintenance to avoid accelerated
engine or component wear. While it is possible to develop scenarios and estimate the impact on
operating costs of current diesel EGR concepts, this is of minimal value due to the expected
continuing development of these technologies. One major focus of the R&D conducted over the
next seven years will be to resolve potential operating cost impacts related to the use of EGR; thus
the current state of the technology is not representative of what is expected for 2004. Furthermore,
for the degree of cooled EGR expected for the proposed 2004 model year standards, even current
data shows very little impact on operating costs. EPA has nevertheless assessed the potential for
increased operating costs, as described below, first for EGR-related maintenance, then for fuel
economy.
While engine-out particulate emissions are dramatically lower than only a few years ago,
recirculating even a small amount of particulate matter through an engine introduces a concern for
engine durability. To prevent wear, manufacturers might specify more frequent oil change intervals
or a greater oil sump volume to accommodate any effects of acidity or particulate agglomeration in
the oil. However, EPA expects manufacturers to make a great effort to minimize any potential new
maintenance burden for the end user. Alternatively, changing fuel or oil formulations may be the
most cost-effective way to reduce the potential for particulate-related wear. EPA therefore believes
that manufacturers will be able to keep engine costs lowest by investing in research to address these
concerns—an expenditure of $10 million to $15 million industry-wide, or about $25 per engine
when amortized over the fleet, should provide sufficient development potential to prevent durability
problems in a way that is transparent to the user. To include the affect of improved materials
resulting from the R&D effort, the analysis incorporates a 2 percent increase in the cost of engine
oil. The increased expense of oil changes over the lifetime of vehicles ranges from $10 to $50 per
engine (net present value at the point of sale).
In addition, EPA has included a cost for preventive maintenance, at the time of rebuild, to
ensure that EGR systems will not malfunction. EPA data show that nearly all engines from heavy
heavy-duty vehicles and 65 percent of those from medium heavy-duty vehicles are rebuilt.3
Rebuilding engines from light heavy-duty vehicles is rare. EPA estimates that engine rebuild occurs
at 240,000 miles for medium heavy-duty vehicles, at 500,000 miles for heavy heavy-duty vehicles,
93
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Final Regulatory Impact Analysis
and at 300,000 miles for urban buses. These mileage figures represent an approximate average
across the various applications within each service class, which experience widely differing mileage
accumulation rates. For example, garbage trucks have much different operating characteristics than
line-haul trucks. According to the MOBILE model, these mileage figures translate into a rebuild in
the eleventh year for both truck categories and in the ninth year for urban buses. EPA expects that
rebuild procedures for EGR systems will include solvent cleaning of the EGR tubing and
replacement of the electronic control valve. Removal, cleaning, and replacement of the tubing are
estimated to take 30 minutes at a $65 per hour labor rate. Replacing the control valve on an
aftermarket basis is expected to cost three times the manufacturers' long-term direct cost, or $65 and
$95 for medium and heavy heavy-duty vehicles, respectively. Calculated in terms of net present
value at the point of sale, the net effect of EGR servicing comes to about $50 for medium heavy-duty
vehicles and $100 for heavy heavy-duty vehicles and urban buses.
With respect to fuel economy, several secondary technologies described below may lead to
cost savings, while EGR has the potential to incur a fuel economy penalty. As with potential new
maintenance cost burdens, EPA believes manufacturers will focus their research efforts on
overcoming any negative impact on fuel economy caused by EGR. In any case, it is not clear at this
stage of development that the set of changes resulting from the proposed emission standards will
have any net negative impact on fuel economy; additional fuel costs are therefore not included in the
cost analysis.
While EPA believes that sufficient R&D and the use of cooled EGR will address operating
cost concerns, one can determine the sensitivity of this position by assessing the potential burden
associated with increased operating costs. Acurex estimated the burden of increasing the oil sump
volume by ten percent to address maintenance concerns with EGR. Oil sump volumes currently
range from 4 gallons for light heavy-duty diesel vehicles to 11 gallons for heavy heavy-duty
vehicles, so the cost impact varies greatly by vehicle category. Calculating a cost at each oil change
as vehicles accumulate mileage and discounting the life-cycle costs to the point of sale results in a
cost estimate of $25, $55, $145, and $95 for light, medium, and heavy heavy-duty vehicles, and
urban buses, respectively.
The cost sensitivity to potential increases in fuel consumption is even more dependent on
vehicle category because of the widely differing mileage accumulation rates for different vehicles.
For each one percent'increase in fuel consumption, Acurex has estimated that life-cycle costs,
calculated as a net present value at the point of sale, are $85, $210, and $720 for light, medium, and
heavy heavy-duty vehicles, respectively.
C. Secondary Technologies
The set of secondary technologies is divided into two categories. Technologies in the first
category have a minor role in controlling NOx emissions, contributing primarily to engine power,
fuel efficiency, or more cost-effective control of particulate emissions. Most of these technologies
would be incorporated for reasons unrelated to the proposed emission standards, but it is possible
94
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that the emission benefits would be a consideration in designing 2004 model year engines. In the
second category are those emission-control technologies that are under development for controlling
NOx emissions, but may not be ready by the 2004 model year. EPA's analysis is based on the view
that the primary technologies described above will be sufficient to meet the proposed standards.
Meeting the proposed NOx + NMHC standard will increase the challenge to control
particulate emissions. Manufacturers might use several different technologies to maintain control
of particulate emissions; however, EPA believes mat the fuel system improvements described above
will be sufficient to prevent any potential increase in particulate emissions. In fact, manufacturers
are attempting to lessen the cost of meeting current particulate emission standards over the next
several years by decreasing their reliance on catalysts. This underscores EPA's belief that 2004
model year engines could control particulate emissions without major technological innovation. The
following paragraphs provide cost estimates for several secondary technology developments.
Manufacturers are expected to reduce the contribution of lubricating oil to engine-out
particulate emissions for light and medium heavy-duty engines. Heavy heavy-duty engines already
have very little oil-related particulate emissions. Hardware costs for improved piston rings and valve
guide seals are estimated at $2.50 per cylinder. R&D and retooling costs are expected to approach.
$1.2 million per engine line. The resulting costs, with appropriate markups, come to S3 5 per engine.
For several years research has focused on improving turbocharger designs to reduce response
time and increase compressor efficiency. One such design, the variable-geometry turbocharger, is
more complex than existing turbochargers, but offers two primary operating enhancements: boost
pressure is maintained over a wider range of engine operation and response time is reduced. These
improvements contribute to lower exhaust emissions and provide control of airflow needed for
engines with EGR. Variable-geometry turbochargers require more parts and more assembly time,
resulting in a variable cost to manufacturers ranging from about $200 to $300 per engine. Fixed
costs for R&D and retooling are estimated at $3.5 million per engine line. Combining the costs with
the appropriate markups results in costs of $271, $349, and $436 for light, medium, and heavy
heavy-duty engines, respectively, for those engines that switch to variable-geometry turbochargers.
Oxidation catalysts are currently in widespread use in light and medium heavy-duty engines.
Acurex developed cost estimates for a next generation of catalysts that may be used in the future to
meet emission standards. Projected catalyst upgrades involve variations of catalyst and washcoat
materials. Th@ projected increase in retail-price-equivalent costs for the new catalysts are $125 and
$165 for light and medium heavy-duty engines, respectively. For urban buses, the new catalysts are
estimated to cost $ 185 more than current models.
Lean NOx catalyst technology is currently the focus of extensive research. Reducing NOx
from diesel exhaust is difficult because of the abundance of oxygen in the exhaust stream. Lean
NOx catalysts, when coupled with oxidation catalysts, would provide effective affcertreatment for
particulate, HC, and CO in addition to reduced NOx emissions. The principle drawback of lean NOx
catalysts is their dependence on a reductant for reaction with the NOx molecules. The most likely
95
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Final Regulatory Impact Analysis
reductant is diesel fuel, based on its ready availabilit) more than its effectiveness with the catalyst.
Diverting fuel to a lean NOx catalyst can be done most easily by injecting fuel into one or more
cylinders at the end of a combustion event. Supplying diesel fuel as a reductant carries with it a fuel
penalty, though some smaller fuel efficiency gains may be possible through injection timing or
removal of other technologies that would otherwise be needed to control NOx emissions. Calculated
fuel penalties include an estimated net penalty of four percent. For light heavy-duty vehicles,
purchase price is estimated to increase by nearly S900 for lean NOx catalysts, with a discounted
lifetime fuel cost of about $350. For medium heavy-duty vehicles, purchase price would increase
approximately $ 1,200 with fuel costs of $900. Heavy heavy-duty vehicles would have costs of about
$1,900 and $3,000 for purchase price and fuel costs, respectively.
IV. Summary of Costs
The per-vehicle cost figures presented above are used in Chapter 7 to calculate the cost-
effectiveness of the program by comparing to emission reductions over the lifetime of each vehicle
category for those engines covered by the new standards. Included in that calculation are the
following modifications for later model year production.
First, manufacturers recover their initial fixed costs for tooling, R&D, and certification over
a five-year period. Fixed costs are therefore applied only to the first five model years of production.
The second modification is related to the effects of the manufacturing learning curve. This
is a well documented and accepted phenomenon dating back to the 1930s. The general concept is
that unit costs decrease as cumulative production increases. Learning curves are often characterized
in terms of a progress ratio, where each doubling in cumulative production leads to a reduction in
unit cost to a percentage "p" of its former value (referred to as a "p cycle"). The organizational
learning which brings about a reduction in total cost is caused by improvements in several areas.
Areas involving direct labor and material are usually the source of the greatest savings. These
include, but are not limited to, a reduction in the number or complexity of component parts,
improved component production, improved assembly speed and processes, reduced error rates, and
improved manufacturing process. These all result in higher overall production, less scrappage of
materials and products, and better overall quality.
Companies and industry sectors learn differently. In a 1984 publication, Dutton and Thomas
reviewed the progress ratios for 108 manufactured items from 22 separate field studies representing
a variety of products and services.4 As shown in Figure 5-1, of the 108 progress ratios observed, 8
were less than 70 percent, 39 were in the range of 71 to 80 percent, 54 were in the range of 81 to 90
percent, and 7 were above 90 percent. The average progress ratio for the whole data set falls
between 81 and 82 percent. The lowest progress ratio of 55 percent shows the biggest improvement,
representing a remarkable 45 percent reduction in costs with every doubling of production volume.
At the other extreme, except for one company that saw increasing costs as production continued,
every study showed cost savings of at least 5 percent for every doubling of production volume. This
data supports the commonly used p value of 80 percent, i.e., each doubling of cumulative production
96
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. Chapter 5: Economic Impact
reduces the former cost level by 20 percent. As each successive p cycle takes longer to complete,
production proficiency generally reaches a relatively stable plateau, beyond which increased
production does not necessarily lead to markedly decreased costs.
97
-------
Figure 5-1
Distribution of Progress Ratios
15
10
>.
o
c
(D
13
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-------
Chapter §? Eg@irii©[finiie imnipasiS
EPA applied a p value of 20 percent beginning in 2004 in this analysis. That is, the variable
costs were reduced by 20 percent for each doubling of cumulative production. However, to avoid
overly optimistic projections, EPA included several additional constraints. Using one year as the
base unit of production, the first doubling would occur at the start of the 2006 model year and the
second doubling at the start of the 2008 model year. To be conservative, EPA incorporated the
second doubling at the start of the 2009 model year. Recognizing that the learning curve effect may
not continue indefinitely with ongoing production, EPA used only two p cycles.
EPA believes the use of the learning curve is appropriate to consider in assessing the cost
impact of heavy-duty engine emission controls. The learning curve applies to new technology, new
manufacturing operations, new parts, and new assembly operations. Heavy-duty diesel engines do
not use EGR of any type today (hot, cooled, or cooled and filtered), nor is widespread use expected
before 2004. This is therefore a new technology for heavy-duty diesel engines and will involve new
manufacturing operations, new parts, and new assembly operations. Since this will be a new and
unique product, EPA believes this is an optimal situation for the learning curve concept to apply.
Opportunities to reduce unit labor and material costs and increase productivity (as discussed above)
will be great. EPA believes a similar opportunity exists for fuel systems on heavy-duty diesel
engines. While all diesel engines have high-pressure fuel injection systems, the changes envisioned
for common rail and unit injection systems require fundamental redesign of system hardware. These
new parts and new assemblies will involve new manufacturing operations. As manufacturers gain
experience with these new systems, comparable learning is expected to occur with respect to unit
labor and material costs. These changes require manufacturers to start new production procedures,
which, over time, will be improved with experience.
Table 5-4 lists the projected schedule of costs over time for each category of heavy-duty
dieseL vehicles. The estimated long-term cost savings would reduce the impact on the total cost of
heavy-duty vehicles by about half.
To demonstrate the sensitivity of the projected learning curves on total costs, Table 5-5
compares the estimated incremental purchase price over time using p values of 0.70 and 0.90 (or 30
and 10 percent savings with every doubling of production, respectively) instead of 0.80. Focusing
on heavy heavy-duty vehicles as an example, the incremental variable cost is projected to decrease
from $210 in the first year to $ 134 for 2009 and later model years using the standard p value of 0.80.
With p values of 0.70 and 0.90, the long-term variable cost is projected to be SI03 or $170,
respectively. With the less aggressive learning scenario (p = 0.90), the learning curve yields total
cost savings of $40, compared to a $76 reduction with the standard p value (p = 0.80). For
comparison, the more aggressive learning (p = 0J0) would result in a $97 reduction in variable
costs. Thus, the various approaches to quantifying learning curves result in projected incremental
costs that are noticeably different, but these differences do not have a significant impact on EPA's
overall characterization of the cost of complying with the new emission standards.5
Characterizing these estimated costs in the context of their fraction of the total purchase price
and life-cycle operating costs is helpful in gauging the economic impact of the proposed standards.
99
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Final Regulatory Impact Analysis
Table 5-6 presents the baseline costs for each vehicle category, as developed by ICF.
V. Aggregate Costs to Society
The above analysis develops per-vehicle cost estimates for each vehicle class. With current
data for the size and characteristics of the heavy-duty vehicle fleet and projections for the future,
these costs can be translated into a total cost to the nation for the proposed emission standards in any
year. The result of this analysis is a projected total cost starting at $242 million in 2004. Per-vehicle
cost savings over time reduce projected costs to a minimum value of $123 million in 2009, after
which the growth in truck population leads to an increase to $180 million in 2020. Total costs for
these years are presented by vehicle class in Table 5-7.
Fixed costs, including R&D, retooling, and certification costs, are summed across the
industry. Costs are amortized equally over five years at a seven percent discount rate. Industry-wide
then, an estimated $310 million of total fixed costs would be recovered at the rate of about
$75 million per year for the first five years of production.
Variable costs are computed as a product of one full year of heavy-duty vehicle sales and the
cost increase for assembly time and new hardware. Based on data submitted by engine
manufacturers, EPA estimates 1995 sales to be 280,000, 140,000, and 220,000 for light, medium,
and heavy heavy-duty diesel vehicles (including urban buses). These numbers are projected to grow
at an annual rate of two percent of the base year (without compounding) through 2020. Total
variable costs in 2004 are estimated at $ 164 million. Variable cost projections for 2020 show a small
decrease, indicating that the decrease in per-engine variable costs over time counters the projected
population growth.
The incremental cost associated with oil changes is incorporated on an annual basis for each
vehicle category. Incremental costs related to rebuild are not include in 2004 or 2009, since the first
rebuilds would be expected after 2009. In 2020, incremental rebuild costs are applied to the vehicles
that would be rebuilt in that year. Maintenance costs are projected to reach nearly $30 million by
2020.
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Chapter 5: Economic Impact
Table 5-4
Projected Long-Term Diesel Engine/Vehicle Costs
(net present value at point of sale in 1995 dollars)
Vehicle Class
Model
Year
Change
Purchase
Price
Life-cycle
Operating
Cost
Light heavy-duty
2004
—
258
7
2006
20 percent learning curve applied to
variable costs
224
7
2009
Fixed costs expire; 20 percent learning
curve applied to variable costs
109
7
Medium heavy-duty
2004
—
397
62
2006
20 percent learning curve applied to
variable costs
355
62
2009
Fixed costs expire; 20 percent
learning curve applied to variable costs
136
62
Heavy heavy-duty
2004
—
467
131
2006
20 percent learning curve applied to
variable costs
411
131
2009
Fixed costs expire; 20 percent
learning curve applied to variable costs
180
131
Urban Bus
2004
—
406
127
2006
20 percent learning curve applied to
variable costs
361
127
2009
Fixed costs expire; 20 percent,
learning curve applied to variable costs
143
127
101
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Final Regulatory Impact Analysis
Table 5-5
Sensitivity of Learning Curves on Incremental Purchase Price
Vehicle Class
Incremental Purchase Price by Model Year
2004
2006
2009
p=0.7
p=0.8
p=0.9
p=0.7
p=0.8
¦o
II
p
Light heavy-duty
$258
$207
$224
$241
$83
$109
$138
Medium heavy-duty
$397
$333
$355
$376
$104
$136
$172
Heavy heavy-duty
$467
$383
$411
$439
$138
$180
$228
Urban Bus
$406
$339
$361
$384
$109
$143
$180
Table 5-6
Baseline Costs for Heavy-Duty Engines and Vehicles
Vehicle Class
Engine Cost
Vehicle Cost
Operating Costs
Light heavy-duty
$7,800
$22,504
$12,450
Medium heavy-duty
$12,400
$46,132
$31,242
Heavy heavy-duty
$21,700
$96,490
$108,027
Urban Bus
$22,000
$224,000
$437,153
102
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Chapter 5: Economic Impact
Table 5-7
Estimated Annual Costs for Improved Heavy-Duty Vehicles
Cost Elements (millions of dollars)
Year
Category
Fixed
Variable
Operation
Total
Light heavy-duty
. 14
56
0.3
71
2004
Medium heavy-duty
28
35
0.2
64
Heavy heavy-duty
33
73
1.1
107
Total Annual Cost
76
164
1.6
242
Light heavy-duty
0
39
2
41
2009
Medium heavy-duty
0
24
1
26
Heavy heavy-duty
0
51
6
56
Total Annual Cost
0
114
9
123
Light heavy-duty
0
46
4
49
2020
Medium heavy-duty
0
28
10
38
Heavy heavy-duty
0
59
34
93
Total Annual Cost
0
134
47
180
103
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Final Regulatory Impact Analysis
CHAPTER 5 References
1 ."Update of EPA's Motor Vehicle Emission Control Equipment Retail Price Equivalent (RPE)
Calculation Fcrrr.u-a," Jack Faucett Associates, Report No. JACKFAU-85-322-3, September
1985.
2.Draft Regulatory Impact Analysis and Oxides of Nitrogen Pollutant Specific Study, p. 3-29 ff..
October 1984.
3."Heavy Duty Engine Rebuilding Practices," Draft EPA Report by Karl Simon and Tom
Strieker, March 21, 1995.
4. J.M Dutton and A. Thomas, Academy of Management Review, Rev. 9, 235, 1984.
5.ICF memo re. engine/operating costs.
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Chapter 6: Environmental Impact
CHAPTER 6: ENVIRONMENTAL IMPACT
This chapter describes the expected environmental impacts of the NMHC plus NOx emission
standards described in the previous chapters. Specifically, this chapter includes an estimated total
nationwide NOx and VOC emission inventory for 1990, heavy-duty diesel vehicle NOx and NMHC
inventory projections for future years (with and without additional control), estimates of the impacts
of the standards on typical vehicles over their lifetime, and a discussion of the environmental effects
of the emission reductions.®
While the standards are combined NMHC plus NOx standards, it was necessary to consider
the NMHC and NOx emission impacts separately. Given the technologies that are expected to be
used for complying with the standards, as described in Chapters 4 and 5, it is reasonable to model
the fleet-average impact of the new standards as being equivalent to a 2.0 g/bhp-hr NOx standard
and a 0.4 g/bhp-hr NMHC standard. This is because the application of these technologies to heavy-
duty engines would be expected to lead to very large reductions in NOx emissions for all engine
families, and small NMHC emission reductions for some engine families. It should be emphasized,
however, that this is only an analytical approach; manufacturers are actually expected to optimize
each engine family uniquely with respect to the combined standards, balancing the sometimes
competing effects of NMHC and NOx control technologies. Thus individual engine families may
have emission levels different from the fleet-average emissions used in this analysis.
I. Total Nationwide Emissions
A. Current Inventories
Total nationwide emissions of NOx and VOC were estimated in the 1994 EPA Trends
Report.1 The purpose of including these inventories here is to show the relative importance of
heavy-duty sources. The highway emissions were estimated using EPA's emission factor model
MOBILE5a, and information from the Federal Highway Administration's Highway Performance
Monitoring System and the 1980 U.S. census. More information about the methodologies used to
Three terms are used in this chapter to describe organic emissions: "total hydrocarbons",
volatile organic compounds", and "nonmethane hydrocarbons". The term "total hydrocarbons" (THC
or HC) refers to the organic emissions from an engine as measured by the test procedures of 40 CFR
86. The term "volatile organic compounds" (VOC) refers to organic emissions excluding
compounds that have negligible photochemical reactivity, primarily, methane and ethane. (For a
more precise definition of VOC, see 40 CFR 51.100.) The term "nonmethane hydrocarbons" refers
to the difference obtained by subtracting methane from total hydrocarbons. Since the ethane content
of emissions is very small from diesel engines, organic emissions measured as NMHC are
approximately the same as when measured as VOC.
107
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Final Regulatory Impact Analysis
estimate the mobile source emissions, as well as the other emissions, can be found in the Trends
Report. The national NOx and VOC emission inventories are summarized in Table 6-1. These data
indicate that emissions from "current" heavy-duty diesel vehicles account for about 10 percent of
total NOx emissions and only 1.3 percent of total VOC emissions.
Table 6-1
1990 National NOx and VOC Emissions
(thousand short tons per year)
Emission Source
NOx
VOC
Light-Duty Vehicles
4,821
6,068
Heavy-Duty Diesel Vehicles
2,332
316
Heavy-Duty Gasoline Vehicles
335
470
Nonroad
2,843
2,120
Other
12,861
15,302
Total Nationwide Emissions
23,192
24,276
B. NOx Emission Projections and Impacts
A detailed analysis of NOx emissions was prepared for EPA by E.H. Pechan and Associates
using the same methodologies as were used in the Trends Report.2 This analysis projected future
emissions with and without new emission standards for heavy-duty vehicles and addressed the
geographic distribution of the emissions. It differed from the 1994 Trends Report in that it
incorporated the effects of the 1994 standards for large nonroad compression-ignition engines, and
that it projected emissions to the year 2020, instead of 2010. The annual growth rates assumed for
highway sources came from the MOBILE4.1 Fuel Consumption Model, while the annual growth
rates for other sources were held constant for the years 2010 through 2020. A more detailed
description of this analysis can be found in the docket.3
The future NOx emissions of heavy-duty vehicles were projected by Pechan using
MOBILE5a, which takes into account the 4.0 g/bhp-hr NOx standard going into effect in 1998, as
well as all existing standards. The effects of this rulemaking were modeled by assuming that the
effect of the combined standards was equivalent to that of 2.0 g/bhp-hr NOx-only standards. This
was projected using MOBILE5a by replacing the basic emission rate (BER) equations11 for 2004 and
hBER equations describe emissions as a function of vehicle mileage, for properly
maintained nontampered vehicles, at specific standard conditions. The equations are in the form
108
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Chapter 6: Environmental Impact
later heavy-duty vehicles, as shown in Table 6-2. The Pechan projections of NOx emissions from
heavy-duty diesel vehicles, with and without the new standards, are summarized in Table 6-3.
Table 6-2
Pechan's Basic Emission Rate Equations
for NOx from 2004 and Later Heavy-Duty Diesel Engines
Zero-Mile Level
g/bhp-hr
Deterioration Rate
g/bhp-hr per 10,000 miles
MOBILE5a Default
3.19
0.000
Modified
1.84
0.000
Table 6-3
Pechan's Estimated National NOx Emissions
from Heavy-Duty Diesel Vehicles (thousand short tons per year)
Year
Without New
Standards
With New
Standards
2005
1,707
1,627
2010
1,728
1,346
2015
1,860
1,251
2020
2,026
1,253
EPA now believes, however, that the default NOx equations for 1991 and later diesel engines
apply a safety margin below the certification emission standards that is too large. The correct
equations should have zero-mile levels of 4.60 g/bhp-hr (instead of 4.00) for 1991 and later model
year engines, which are subject to a 5.0 g/bhp-hr standard; 1998 and later model year engines, which
are subject to a 4.0 g/bhp-hr standard, should have zero-mile levels of 3.68 g/bhp-hr (instead of
3.19). This is reflected in Table 6-4.
of zero-mile level (ZML) plus the product of a deterioration rate (DR) and mileage(M):
BER = ZML + DR*M.
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Final Regulatory Impact Analysis
Table 6-4
Basic Emission Rate Equations for
2004 and Later Heavy-Duty Diesel Engines
Zero-Mile Level
g/bhp-hr
Deterioration Rate
g/bhp-hr per 10,000 miles
Without New Standard
3.68
0.000
With New Standard
1.84
0.000
It should be noted that each of these BER equations predict that emissions at the end of the
useful life would be at least 5 percent below the applicable standard. This is because manufacturers
include a compliance cushion in the design of their engines to account for production variability,
which results in the average end-of-useful life emissions for an engine being below the level of the
standard to which it was certified. The NOx inventories were corrected by multiplying the Pechan
estimates for total emissions diesel vehicles by the ratios of the fleet-average NOx emission factors
predicted by MOBILE5a with and without the revised BER equations. For example, for the year
2020, the MOBILE5a emission factors for heavy-duty diesel vehicles, without the new standard,
were 7.57 g/mi and 6.56 g/mi, with and without the corrections, respectively. Thus, the Pechan
estimate (2,026,000 tons per year) was multiplied by 7.57/6.56 (1.154) to give 2,338,000 tons per
year. The effects of these revisions on the emission inventories are shown in Table 6-5.
Table 6-5
Revised Estimate of National NOx Emissions
from Heavy-Duty Diesel Vehicles (thousand short tons per year)
Year
Uncorrected
Emissions
Without New
Standard
Corrected
Emissions
Without New
Standard
Uncorrected
Emissions
With New
Standard
Corrected
Emissions
With New-
Standard
Emission
Reduction
From New
Standard
2005
1,707
1,922
1,627
1,816
106
2010
1,728
1,980
1,346
1,462
518
2015
1,860
2,146
1,251
1,314
832
2020
2,026
2,338
1,253
1,272
1,066
Figure 6-1 shows corrected projections of total NOx emissions, with and without the new
engine controls for the entire nation. The emissions are projected to decline over the next several
years, due to implementation of stricter controls, but then begin to increase due to growth in the
number of vehicles and other sources, unless there are additional controls. By the year 2020, without
110
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Chapter 6: Environmental Impact
these additional controls, total national NOx emissions are projected to exceed current levels. Figure
6-2 shows the corrected projections of mobile source emissions by category. The estimates of the
total NOx reductions are shown in Table 6-6.
Table 6-6
Estimated National NOx Emission Reductions
from 2004 Model Year Heavy-Duty Diesel Vehicles
(thousand short tons per year)
Year
Emission
Reductions
2005
106
2010
518
2015
832
2020
1,066
C. NMHC Emission Projections and Impacts
Estimates of the impact of the new standards on NMHC emissions are described below.1 For
this analysis, it was assumed that the effect of the combined standards was equivalent to 0.4 g/bhp-hr
NMHC-only standards. Emissions were modeled using MOBILE5a with modified BER equations
for NMHC emissions. It was necessary to modify the BER equations to account for recent
certification emission data, which show that NMHC emissions are lower than predicted by the
MOBILE5a default equations. It should be noted that the analysis of the NMHC emission impacts
is limited to a large extent by the difficulty in projecting what the NMHC emissions from heavy-duty
engines will be in the future in the absence of new standards. This difficulty arises because NMHC
emission levels from heavy-duty engines are largely the incidental result of a variety of other engine
design constraints, and thus are highly variable. As is described below, the fact that total HC
emissions from current engines are so far below the applicable HC standards, and that they vary
among different engine families by more than an order of magnitude, is evidence of the incidental
nature of HC emission reductions.
'Heavy-duty engines do not currently have applicable NMHC standards, so the discussion
in this section focuses on total hydrocarbon emissions.
Ill
-------
26
24
22
20
18
Fig. 6-1. Projected National NOx Emissions
H
i
16
1990
2000
2010
2020
¦ Without Control + With Control
-------
Fig. 6-2. Projected National NOx Emissions
Mobile Sources by Class
0 i . .1 . ...
1990 2000 2010 2020
¦ Light-Duty Vehicles Nonroad Mobile Sources
-Ar HDVs Without Control y\ HDVs With Control
-------
Final Regulatory Impact Analysis
Figure 6-3 shows the distribution of HC emission levels among 1994 certification diesel
engine families. Only one of the 90 engine families has HC emissions that are even close to the level
of the standard, and more than 90 percent of the engine families have HC emissions of 0.5 g/bhp-hr
or less. (For this analysis, it is assumed that NMHC emissions from diesel engines are
approximately 95 percent of total HC emissions.) Much of the reason for this is that the tight
particulate standards already in place have forced manufacturers to improve combustion conditions
in their engines or add catalytic aftertreatment, and both of these also reduce HC emissions; though
the magnitude of the effect varies by technology and by engine. On the other hand, the use of
control strategies that reduce NOx emissions often leads to increases in HC emissions. Thus, as
manufacturers modify their engine designs to improve fuel economy and to comply with the lower
1998 NOx standard, HC emissions will undoubtedly change. However, determining how these
emissions will change would require detailed knowledge of each manufacturer's optimization
strategy. Even if the effect of these future changes could be determined, changes in the numbers of
engines produced for each engine family will also change by 2004, and it would not be possible to
properly weight the emissions from those engines. The average HC emissions for engines sold in
the year 2004 could increase either because of increases in the emission levels of some of the engine
families, or because of a market shift to engine families with higher emission levels and away from
engines families with lower emission levels.
114
-------
Fig. 6-3. 1994 Diesel HC Certification Emissions
Cumulative Distribution by Engine Family
Standard (1.3 g/BHP-hr)
20 40 60 80
Percent of Engine Families
-------
Final Regulatory Impact Analysis
If it is assumed that the NMHC emission levels and market share for each engine family in
2004 will be the same as they were in 1994, then the net effect of a 0.4 g/bhp-hr NMHC emission
standard would be very small' for diesel engines. Those engines with NMHC emissions currently
greater than 0.4 g/bhp-hr represented about ten percent of the sales in 1994. The reduction that
would result if all of these engines certified at 0.4 g/bhp-hr NMHC would be about nine percent,
based on 1994 sales data. If none of the engines families that have NMHC emissions at or below
0.4 g/bhp-hr had increases in NMHC emissions, then the total emission reduction would be the same.
However, it is probable that NMHC emission would increase for some of those engine families as
a result of the changes made to lower NOx emissions; thus, it is possible that there may be an even
larger reduction in average NMHC emissions as a result of this action.
The potential impact of these NMHC reductions (9 percent for diesel engines) on nationwide
emissions was modeled using MOBILE5a with modified BER equations for NMHC emissions, as
shown in Table 6-7. The baseline emissions (without new standard) were based on the 1994
certification data. It was assumed that there is no deterioration, and that the zero-mile level was
equal to the sales weighted average certification emission level. The control-case emissions were
determined by reducing the zero-mile levels and deterioration rates by nine percent. The estimates
of vehicle miles traveled were based on the Pechan estimates. The results are shown in Table 6-8.
This approach would lead to much lower projections of VOC emissions than those predicted by the
Trends Report, because the Trends Report analysis used the MOBILE5a default BER equations for
HC emissions, which predict significantly higher emissions than those used here.
Table 6-7
Basic Emission Rate Equations for
HC Emissions from Heavy-Duty Diesel Engines
Zero-Mile Level
g/bhp-hr
Deterioration Rate
g/bhp-hr per 10,000 miles
Without New Standard
0.283
0.000
With New Standard
0.257
0.000
116
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Chapter 6: Environmental Impact
Table 6-8
Estimated National NMHC Emission Reductions
for 2004 Model Year Heavy-Duty Diesel Engines
(thousand short tons per year)
Year
Emission
Reductions
2004
1.5
2005
2.2
2006
2.9
2007
3.9
2008
4.7
2009
5.6
2010
6.8
2011
7.7
2012
8.9
2013
10.0
2014
11.0
2015
12.1
2016
13.0
2017
13.9
2018
14.8
2019
15.7
2020
16.4
II. Per-Vehicle Emission Impacts
In addition to the fleet analysis described above, EPA estimated the per-vehicle NOx and
NMHC emission reductions due to the new standards over the life of average heavy-duty diesel
vehicles. The per-vehicle reductions were predicted for the three different categories of heavy-duty
diesel vehicles covered by the new engine standards. The resulting lifetime emission reductions are
used in Chapter 7 for determining the per-vehicle cost-effectiveness of the new standards.
To calculate the per-vehicle emission reductions, two pieces of information are needed:
117
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Final Regulatory Impact Analysis
vehicle-specific emission factors (in grams per mile) and yearly mileage accumulation rates over the
life of an average heavy-duty diesel vehicle. The following section presents the information used
in calculating the per-vehicle NOx and NMHC emission reductions over the life of average heavy-
duty diesei vehicles as well as the estimated per-vehicle NOx and NMHC emission reductions.
A. Per-Vehicle Emission Factors
Sections II.B and II.C of this chapter present the per-vehicle NOx and NMHC zero-mile
emission level and deterioration rates, respectively, assumed in modeling the nationwide emission
inventories. Both sections present the assumptions for vehicles complying with the new standards
and for vehicles designed in the absence of tighter 2004 standards (i.e., subject to the standards in
effect immediately prior to the 2004 model year). The emission reduction due to the new standards
is the difference between the two numbers. Estimated brake-specific, zero-mile emission reductions
are 1.84 g/bhp-hr for NOx and 0.026 g/bhp-hr for NMHC.
To estimate emissions on a gram-per-mile basis, EPA multiplies the brake-specific emission
levels (g/bhp-hr) by "conversion factors." For this analysis, EPA used conversion factors for specific
vehicle classes, as derived from the information contained in the EPA technical report, "Heavy-Duty
Vehicle Emission Conversion Factors II" (EPA-AA-SDSB-89-01, October 1988). To estimate the
conversion factors for the various heavy-duty diesel vehicle categories, EPA weighted the individual
class conversion factors by the sales estimates contained in the report noted above using the
information presented for model year 2000 and later. Table 6-9 contains the resulting conversion
factors for the different categories of heavy-duty diesel vehicles presented in this analysis.
Table 6-9
Conversion Factors for Heavy-Duty Diesel Vehicles .
Vehicle Category
Conversion Factor
(bhp-hr/mi)
Light HD
0.919
Medium HD
2.07
Heavy HD
3.10
Table 6-10 presents the estimated zero-mile level emission reductions due to the new
standards based on the conversion factors listed above.
118
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Chapter 6: Environmental Impact
Table 6-10
Difference in Emission Levels
Due to the New Standards for Heavy-duty Diesel Engines
Vehicle
Zero Mile Level Reduction (g/mi)
NOx
NMHC
Light HD
1.69
0.024
Medium HD
3.81
0.054
Heavy HD
5.70
0.081
6. Per-Vehicle Average Mileage Accumulation Rates
Table 6-11 contains the MOBILE5 mileage accumulation rates used in this analysis to predict
the mileage accumulation rates for average heavy-duty vehicles over a 30-year period.
The mileage accumulation rates contained in Table 6-11 represent the number of miles a
heavy-duty diesel vehicle would drive in a given year assuming the vehicle had not been scrapped
(i.e., removed from the fleet) for some reason. In order to estimate the per-vehicle average mileage
accumulation rates for the average vehicle in the fleet it is necessary to factor in the effect of
scrappage. MOBILE5 contains information on the registration distribution of heavy-duty diesel
vehicles by model year, but it does not include explicit scrappage rates. An attempt was made to
determine the scrappage rates that would provide the same registration distribution contained in
MOBILE5. However, because the MOBILE5 registration distributions are based on a snapshot of
the 1990 fleet and therefore include the effects of sales swings in the heavy-duty vehicle market,
EPA was unable to develop scrappage rates that would reproduce the registration distribution
contained in MOBILE5. For this reason, EPA used the registration distributions contained in the
EMFAC7F model developed by the California Air Resource Board to predict the scrappage rates for
heavy-duty diesel vehicles. The registration distributions contained in the EMFAC7F model
represent an average registration distribution and do not include the impact of year to year sales
swings. Table 6-12 contains the resulting survival rates for heavy-duty diesel vehicles used in this
analysis. For a given vehicle age9 the numbers contained in Table 6-12 represent the fraction of the
original number of vehicles sold that are still in existence at that point in time.
Table 6-13 contains the average annual mileage accumulation rates for heavy-duty diesel
vehicles factoring in the effect of scrappage. The average life totals contained at the bottom of
Table 6-13 represent the number of miles an average heavy-duty diesel vehicle accumulates over a
30-year life.
Based on the average life totals contained in Table 6-13, EPA determined the number ot
119
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Final Regulatory Impact Analysis
years it would take for vehicles to accumulate that level of mileage based on the mileage
accumulation rates in Table 6-11 (i.e., rates that do not factor in scrappage). Table 6-14 contains the
years it takes for a heavy-duty diesel vehicle to accumulate the average lifetime mileage.
Table 6-11
MOBILE5 Mileage Accumulation Rates by Vehicle Category
Vehicle
Age
HDDVs
Lieht
Medium
Heaw
1
22,517
26,081
62,176
2
20,009
25,204
58,663
3
17,779
24,357
55,348
4
15,798
23,538
52,220
5
14.038
22,746
49,269
6
11,474
21,982
46,485
7
11,084
21,243
43,858
8
9,849
20.528
41,380
9
8,752
19,838
39,042
10
7,777
19,171
36,836
11
6,910
18,527
34,754
12
6,140
17,904
32,790
13
5,456
17,302
30,937
14
4,848
16,720
29,189
15
4,308
16,158
27,540
16
3,828
15,614
25,983
17
3,402
15,089
24,515
18
3,023
14,582
23,130
19
2,686
14,092
21,823
20
2,387
13,618
20,590
21
2,121
13,160
19,426
22
1,884
12,718
18,328
23
1,675
12,290
17,293
24
1,488
11,877
16,315
25
1,322
11,478
15,393
26
1,322
11,478
15,393
27
1,322
11,478
15,393
28
1,322
11,478
15,393
29
1,322
11,478
15,393
30
1,322
11,478
15,393
Total
198,165
503,207
920,248
120
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Chapter 6: Environmental Impact
Table 6-12
Estimated Vehicle Survival Rates
Vehicle Age
Registration Distribution
1
1.000
¦>
1.000
3
0.909
4
0.851
5
0.827
6
0.827
7
0.827
8
0.788
9
0.749
10
0.668
11
0.598
12
0.540
13
0.466
14
0.417
15
0.395
16
0.387
17
0.363
18
0.339
19
0.315
20
0.304
21
0.278
22
0.251
23
0.238
24
0.238
25
0.213
26
0.177
27
0.142
28
0.106
29
0.071
30
0.035
121
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Final Regulatory Impact Analysis
Table 6-13
Average Mileage Accumulation Rates
• by Vehicle Category (Factoring in Scrappage)
Vehicle Age
HD Diesel
Lieht
Medium
Heaw
1
22,517
26,081
62,176
2
20,009
25,204
58,663
3
16,157
22,135
50,299
4
13,437
20,020
44,415
5
11,607
18,807
40,736
6
10,314
18,176
38,437
7
9,164
17,563
36,260
8
7,764
16,182
32,620
9
6,551
14,849
29,223
10
5,195
12,807
24,608
11
4,134
11,084
20,793
12
3,314
9,664
17,700
13
2,541
8,058
14,407
14
2,022
6,974
12,174
15
1,702
6,384
10,881
16
1,480
6,038
10,048
17
1,236
5,484
8,910
18
1,026
4,949
7,850
19
845
4,432
6,864
20
726
4,140
6,260
21
589
3,655
5,395
22
472
3,187
4,593
23
399
2,930
4,123
24
355
. 2,832
3,890
25
281
2,444
3,277
26
235
2,036
2,731
27
188
1,629
2,185
28
141
1,222
1,639
29
94
815
1,092
30
47
407
546
Avg. Life-
time miles
145,000
280,000
560,000
122
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Chapter 6: Environmental Impact
Table 6-14
Heavy-Duty Vehicle Average Lifetimes (years)
Light HD
Medium HD
Heavy HD
10
13
12
C. Estimated Per-Vehicle Average Lifetime Emission Reductions
Table 6-15 contains the per-vehicle average lifetime NOx and NMHC emission reductions,
both discounted (at a rate of three percent) and undiscounted, for the various categories of heavy-
duty diesel vehicles. The numbers are based on the emission reductions contained in Table 6-10 and
the annual mileage accumulation rates contained in Table 6-11 summed over the number of years
it takes to achieve the average lifetime total mileage.
Table 6-15
Per-Vehicle Average Lifetime Emission Reductions
Due to the New Standards for Heavy-Duty Diesel Engines
Vehicle
Category
Undiscounted Reductions (lbs.)
Discounted Reductions (lbs.)
NOx
NMHC
NOx
NMHC
Light HD
540
10
480
10
Medium HD
2,350
30
2,000 •
30
Heavy HD
7,040
100
6,120
90
III. Environmental Impacts of Emission Reductions
A. Ozone Impacts
The effect of the reduced NOx emissions on ozone concentrations is expected to vary
geographically. In general, when fully phased-in, the effect of this action in most nonattainment
areas should be a reduction in ozone concentrations on the order of a few percent. It should be
noted, however, that the potential exists for a few localized areas to actually experience slight
increases in ozone concentrations as a result of NOx emission reductions. The effect of the NMHC
reductions on ozone concentrations will be positive, though relatively small.
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Final Regulatory impact Analysis
B. Particulate Impacts
The new emission standards should not affect particulate emissions from heavy-duty engines,
since they do not change the particulate standard. However, the NOx reductions described above
are expected to provide reductions in the concentrations of secondary nitrate particulates. As
described in Chapter 2, NOx can react with ammonia in the atmosphere to form ammonium nitrate
particulates, especially when ambient sulfur levels are relatively low.
EPA contracted with Systems Applications International (SAI) to investigate the formation
of secondary nitrate particulates in the United States.4 SAI used a combination of ambient
concentration data and computer modeling that simulates atmospheric conditions to estimate the
conversion of NOx to PM nitrate. For the purpose of modeling, the continental 48 states were
divided into nine regions, and rural areas were distinguished from urban areas. The model was
designed to perform the equilibrium calculation to estimate particulate nitrate formation for different
regions, seasons, and times of day and then was calibrated using ambient data.
Ambient data was collected from 72 ozone, 64 NOx, and 14 NOMC monitoring sites for use
in the oxidation calculations. Data was also collected from 45 nitrate/NOx monitoring sites for use
in the equilibrium calculations. SAI admitted that, in a number of regions, the available data from
monitoring sites was limited and stated that more data would improve confidence in the results from
these regions. However, EPA has reviewed the SAI report and its associated uncertainty analysis
and believes that is the best estimate of atmospheric NOx to PM nitrate conversion rates available
today.
The results from the SAI report state that the fraction of NOx converted to nitrates (g/g)
ranges from 0.01 in the northeast to 0.07 in southern California. Based on the vehicle miles traveled
in the various regions, the average fraction of NOx converted to nitrates is approximately 0.04. This
value changes slightly from year-to-year due to the effects of ozone and SOx projections on the
calculations for future years. The effects of the conversion fraction on future PM reductions is
shown in Table 6-16.
124
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Chapter 6: Environmental Impact
Table 6-16
Estimated Equivalent National Particulate Emission Reductions
from 2004 Model Year Heavy-Duty Engines (thousand short tons per year)
Year
Total NOx
Emission Reductions
Equivalent Particulate
Emission Reductions
2005
106
5
2010
518
22
2015
832
35
2020
1,066
44
C. Other Impacts of Emission Reductions
The expected reductions in NOx emissions should also positively effect visibility, acid
deposition, and estuary eutrophication. As noted in Chapter 2, both N02 and nitrate particulates are
optically active, and in some urban areas, N02 and nitrate particulates can be responsible for 20 to
40 percent of the visible light extinction. The effect of this action on visibility should be small but
potentially significant, given that it is expected to reduce overall NOx emissions by several percent.
For example, the new engine controls are expected to result in about five percent less total NOx in
the year 2020, and therefore would be expected to decrease haze by about one percent in an area
where N02 and nitrate particulates cause 20 percent of the haze.
The new standards are also expected to provide benefits with respect to acid deposition. The
1.2 million ton per year reduction in NOx emissions expected in 2020 as a result of this action is
greater than the 400,000 ton per year reduction expected from Phase I of the Agency's acid rain NOx
control rule (59 FR 13538, March 22, 1994), which was considered to be a significant step toward
controlling the ecological damage caused by acid deposition. It is not clear, however, that reducing
emissions of NOx from ground-level sources such as heavy-duty vehicles is truly equivalent to
reducing NOx emissions from elevated smokestacks, since NOx emitted higher into the atmosphere
is likely to travel further downwind, undergoing additional reactions before deposition.
Nevertheless, it is clear that there will be some significant reduction in the adverse effects of acid
deposition as a result of this rule.
This action should also lead to a reduction in the nitrogen loading of estuaries. This is
significant since high nitrogen loadings can lead to eutrophication of the estuary, which causes
disruption in the ecological balance. The effect should be most significant in areas heavily affected
by atmospheric NOx emissions. One such estuary is Chesapeake Bay, where as much as 40 percent
of the nitrogen loading may be caused by atmospheric deposition.
125
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Final Regulatory Impact Analysis
IV. Summary
The prcji-ciwd total NOx and NMHC emission reductions expected as a result of this action
are shown in Figure 6-4. NOx reductions are projected to exceed 1.2 million tons per year in 2020,
which would be a five percent reduction in the total NOx inventory. NMHC reductions are projected
to be much smaller, about 25,000 tons per year in 2020, which would be much less than one percent
of the national NMHC (or VOC) inventory. These emission reductions are expected to contribute
very significantly towards reducing and controlling ambient ozone levels in the future, counteracting
the expected effects of new sources and growth in vehicle miles traveled. The new controls would
also result in benefits with respect to nitrate particulates, visibility, acid deposition, and estuarine
eutrophication.
126
-------
Fig. 6-4. Projected Benefits of Control
NOx, NMHC, and Nitrate Particulate
1200
1000
800
600
400
200
NOx
Nitrate Particulate
NMHC
0
2000
_ i
2005
100
80
60
40
20
2010 2015
Year
2020
0
2025
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Final Regulatory Impact Analysis
CHAPTER 6 References
1. "National Air Pollutant Emission Trends, 1900-1993". EPA-454/R-94-027.
2. Inventory Development Summary Report From E.H. Pechan and Associates, Draft, August
1995, EPA Docket A-95-27, # II-A-11.
3. Inventory Development Summary Report from E.H. Pechan and Associates, Docket A-95-27,
# II-A-11.
4. "Benefits of Mobile Source NOx Related Particulate Matter Reductions;' Systems
Applications International, EPA Contract No. 68-C5-0010, WAN 1-8, October 1996.
128
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eEWTKR 7: COSTNEFFECTWiH
This chapter assesses the cost-effectiveness of the requirements being finalized for new
heavy-duty diesel engines, including the new standards, useful life, allowable maintenance and
rebuild provisions. This analysis relies in part on cost information from Chapter 5 and emissions
information from Chapter 6 to estimate the cost-effectiveness of the provisions in terms of dollars
per ton of total emission reductions. This chapter also examines the sensitivity of the cost-
effectiveness numbers for the provisions under varying assumptions regarding fuel economy impacts
and maintenance costs, and different assumptions regarding the cost of technologies likely to be used
to comply with the standards being finalized. Finally, the chapter compares the cost-effectiveness
of the new provisions with the cost-effectiveness of other NOx control strategies from previous EPA
rules.
The analysis presented in this chapter is performed for heavy-duty diesel vehicles (including
a breakout for individual heavy-duty diesel categories). The analysis is performed on a per-vehicle
basis and examines total costs and total NOx plus NMHC emission reductions over the typical
lifetime of a heavy-duty diesel vehicle, discounted at a rate of three percent to the beginning of the
vehicle's life. An analysis of the fleet cost-effectiveness for 30 model years after the new engine
standards take effect is also presented.
The cost-effectiveness of the provisions is analyzed under two different cost-effectiveness
scenarios. The first scenario presents the nationwide cost-effectiveness in which the net present
value (NPV) of the total life-cycle costs is divided by the discounted lifetime NOx plus NMHC
emission benefits. The second scenario presents a regional ozone control strategy cost-effectiveness
in which the net present value of the total life-cycle costs is divided by the discounted lifetime NOx
plus NMHC emission benefits after adjusting for the fraction of emissions that occur in the regions
that are expected to impact ozone levels in ozone nonattainment areas. Air quality modeling
indicates that these regions include all of the states that border on the Mississippi River, all of the
states east of the Mississippi River, Texas, California, and any remaining ozone nonattainment areas
west of the Mississippi River not already included. Based on the emission modeling performed in
support of the environmental impacts analysis presented in Chapter 6, it was estimated that
approximately 87 percent of the nationwide NOx and VOC emissions from heavy-duty vehicles
occur in these regions. (See also Chapter 2 for additional discussion of this regional approach.)
Therefore, for the regional ozone control strategy cost-effectiveness calculations, the per-vehicle
NOx plus NMHC emission reductions were multiplied by a factor of 0.87 (i.e., reduced by
13 percent) to account for the impact that the new engine standards will have on ozone levels in
ozone nonattainment areas.
The following section describes the cost-effectiveness of the new engine NOx and NMHC
standards for the various categories of heavy-duty diesel vehicles noted above. As discussed in
Chapter 5, the estimated cost of complying with the provisions varies depending on the model year
129
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Final Regulatory Impact Analysis
under consideration. Therefore, the following section presents the per-vehicle cost-effectiveness
results for the different model years during which the costs are expected to change. Just as the
emission standard combines NOx and NMHC emissions, the cost-effectiveness of adopting the new
standard is calculated by dividing the combined NOx and NMHC emission reductions into the cost
of compliance.
Also presented is the fleet cost-effectiveness over the first 30 model years after the new
engine standards take effect (i.e., model years 2004 through 2033). These cost-effectiveness
numbers are calculated by weighting the various model year per-vehicle cost-effectiveness results
by the fraction of the total 30 model year sales they represent. The sales for the different categories
of heavy-duty diesel engines that would be covered by the rule based on the 1995 model year were
determined using production information provided by manufacturers to EPA and were assumed to
grow at a linear rate of two percent from the 1995 levels. Table 7-1 contains the numbers used in
the cost-effectiveness analysis of 1995 model year heaivy-duty diesel engines affected by the new
emission standards.
Table 7-1
1995 Model Year Production of Affected Heavy-Duty Diesel Engines
Light HD
Medium HD
Heavy HD
280,000
140,000
220,000
A copy of the spreadsheets prepared for this cost-effectiveness analysis has been placed in
the public docket for this rulemaking. The reader is directed to the spreadsheets for a complete
version of the cost-effectiveness calculations.
I. Cost-Effectiveness of the NOx and NMHC Emission Standards
Tables 7-2, 7-3, and 7-4 contain the total net present value costs based on the information
presented in Chapter 5, the lifetime emission reductions as presented in Chapter 6, and the resulting
cost-effectiveness values for the two cost-effectiveness scenarios described earlier for light-,
medium-, and heavy-heavy duty diesel vehicles, respectively. Tables 7-2, 7-3 and 7-4 also contain
the fleet cost-effectiveness covering the first 30 model years after the new engine standards take
effect (i.e., model years 2004 through 2033).
130
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Chapter 7: Cost-Effectiveness
Tabic 7-2
Cost-Effectiveness for Light Heavy-Duty Diesel Vehicles
Model
Year
Grouping
Total
NPV
Costs per
Vehicle
Discounted
Lifetime Reduction
(tons)
Discounted Per-Vehicle
Cost-Effectiveness
($/ton)
NOx
NMHC
Nationwide
Scenario
Regional
Strategy
Scenario
2004-05
$265
0.242
0.003
$1100
$1200
2006-08
$231
$900
$1100
2009+
$117
$500
$500
30 Year
Fleet
—
—
—
$600
$700
Table 7-3
Cost-Effectiveness for Medium Heavy-Duty Diesel Vehicles
Model
Year
Grouping
Total
NPV
Costs per
Vehicle
Discounted
Lifetime Reduction
(tons)
Discounted Per-Vehicle
Cost-Effectiveness
($/ton)
NOx
NMHC
Nationwide
Scenario
Regional
Strategy
Scenario
2004-05
$459
1.002
0.014
$500
$500
2006-08
$417
$400
$500
2009+
$198
$200
$200
30 Year
Fleet
—
—
—
$200
$300
131
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Final Regulatory Impact Analysis
Table 7-4
Cost-Effectiveness for Heavy Heavy-Duty Diesel Vehicles
Model
Year
Grouping
Total
NPV
Costs per
Vehicle
Discounted
Lifetime Reduction
(tons)
Discounted Per-Vehicle
Cost-Effectiveness
($/ton)
NOx
NMHC
Nationwide
Scenario
Regional
Strategy
Scenario
2004-05
$598
3.059
0.043
$200
$200
2006-08
$542
$200
$200
2009+
$311
$100
$100
30 Year
Fleet
—
—
—
$100
$100
132
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Chapter 7: Cost-Effectiveness
Table 7-5 contains the total net present value costs, the lifetime emission reductions, and the
resulting cost-effectiveness values for all heavy-duty diesel vehicles for the two cost-effectiveness
scenarios described earlier. In determining the cost-effectiveness for all heavy-duty diesel vehicles,
the cost and emission reductions for all heavy-duty diesel vehicles were determined by weighting
the corresponding light, medium, and heavy heavy-duty diesel vehicle results by the respective sales
estimates for each year.
Table 7-5
Cost-Effectiveness for All Heavy-Duty Diesel Vehicles
Model
Year
Grouping
Total
Average
NPV
Costs per
Vehicle
Discounted
Lifetime Reduction
(tons)
Discounted Per-Vehicle
Cost-Effectiveness
($/ton)
NOx
NMHC
Nationwide
Scenario
Regional
Strategy
Scenario
2004-05
$422
1.377
0.019
$300
$300
2006-08
$379
$300
$300
2009+
$202
$100
$200
30 Year
Fleet
—
—
—
$200
$200
133
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Final Regulatory Impact Analysis
In addition to the primary benefit of reducing ozone within and transported into urban ozone
nonattainment areas, the NOx reductions from the new engine standards are expected to have
secondary benefits as well. These secondary benefits include impacts with respect to human
mortality, human morbidity, agricultural yields, visibility, soiling (due to secondary particulate), and
ecosystems (e.g., through the reduced effects of acid deposition and eutrophication). In order to
estimate the monetary value of these secondary benefits to society, ICF Incorporated prepared a
study summarizing the results of a variety of studies that examined the value of ozone control on the
secondary benefits highlighted above.5 Table 7-6 contains a summary of the results of the ICF
report. The total value of all the secondary benefits is estimated to $967 per metric ton of NOx
reduction. It should be noted that the cost-effectiveness analysis presented in this chapter does not
assign any value to these secondary benefits. They are presented in this chapter for informational
purposes only.
Table 7-6
Summary of Estimated Monetized Benefits per Ton
Benefit Category
Point Estimate of Benefits per
Metric Ton of NOx Reduction
Human Mortality
$343
Human Morbidity
$11
Agricultural Yields
$316
Soiling
$19
Ecosystems
$18
Visibility
$260
II. Cost-Effectiveness Sensitivity Analyses
The following section presents an analysis of the sensitivity of the cost-effectiveness results
for heavy-duty diesel vehicles to different assumptions regarding the impact of the new standards
on fuel economy and maintenance costs. Based on the substantial lead time available and the R&D
expected, EPA is not projecting losses in fuel economy, engine durability, or increased maintenance.
Even if such impacts were to occur for a few engines, they would be short-term in nature.
Nonetheless, it is of value to examine the sensitivity of the cost-effectiveness estimates to potential
short-term changes. The sensitivity of the estimated heavy-duty diesei vehicle cost-effectiveness
results to different projections regarding the cost of technologies that wili be needed to comply with
the new standards is also examined.
134
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Chapter 7: Cost-Effectiveness
A. Sensitivity to Fuel Economy Penalty
Table 7-7 contains the discounted per-vehicle lifetime cost associated with a Vi percent fuel
economy penalty calculated over the typical lifetime of heavy-duty diesel vehicles. As discussed
above, it is projected that any fuel economy penalty would be short-term. For this analysis, the fuel
economy penalty was assumed to apply for the first five model years (i.e., 2004 through 2008) only.
Table 7-7
Discounted Per-Vehicle Lifetime Operating Costs
Associated with a Vi Percent Fuel Economy Penalty
Light HD
Medium HD
Heavy HD
All Heavy-Duty
$52
$133
$450
$207
To calculate the cost-effectiveness of the new standards with the fuel economy penalty, the
fuel economy penalty costs in Table 7-7 were added to the per-vehicle costs (contained in Table 7-5)
and then divided by the emission reductions (as presented in Table 7-5). Table 7-8 contains the
resulting discounted per-vehicle cost-effectiveness numbers.
Table 7-8
Cost-Effectiveness for All Heavy-Duty Diesel Vehicles
Assuming an Average Vi Percent Fuel Economy Penalty
Model
Year
Grouping
Total
NPV
Costs per
Vehicle
Discounted
Lifetime Reduction
(tons)
Discounted Per-Vehicle
Cost-Effectiveness
($/ton)
NOx
NMHC
Nationwide
Scenario
Regional
Strategy
Scenario
2004-05
$629
$400
$500
2006-08
$585
1.377
0.019
$400
$500
2009+
$202
$100
$200
30 Year
Fleet
—
—
—
$200
$200
135
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Final Regulatory Impact Analysis
Comparing the 30-year fleet cost-effectiveness results in Table 7-8 with those presented in
Table 7-5, it can be seen that a fuel economy penalty of 0.5 percent has only a slight impact on the
cost-effectiveness results.
B. Sensitivity to Increased Maintenance Costs
As described in Chapter 5, it is possible that there may be greater maintenance costs
associated with exhaust gas recirculation (EGR), such as increased oil capacity and therefore
increased oil change costs. Table 7-9 contains the discounted per-vehicle lifetime cost associated
with increased oil capacity assuming that 25 percent of vehicles would have their oil capacity
increased by 10 percent. (The remaining 75 percent of vehicles continue to have slightly increased
oil change costs for the reasons described in Chapter 5.)
Table 7-9
Discounted Per-Vehicle Lifetime Maintenance
Costs Associated with Increased Oil Capacity
Light HD
Medium HD
Heavy HD
All Heavy-Duty
$9
$14
$36
$19
To calculate the cost-effectiveness of the new standards with the increased maintenance
costs, the increased maintenance costs in Table 7-9 were added to the per-vehicle costs (contained
in Table 7-5) and then divided by the emission reductions (as presented in Table 7-5). Table 7-10
contains the resulting discounted per-vehicle cost-effectiveness numbers.
Comparing the 30 year fleet cost-effectiveness results in Table 7-10 with the results presented
in Table 7-5, it can be seen that the increased maintenance cost has almost no effect on cost-
effectiveness.
C. Sensitivity to the Cost of Projected Compliance Technologies
As described in Chapter 5, there is some uncertainty regarding the exact mix of technologies
that will be used to comply with the new standards. For this analysis, EPA did not attempt to project
different technology mixes than those contained in Chapter 5. However, to determine the sensitivity
of these cost effectiveness projections to potentially higher cost estimates that could be associated
with different technology projections, EPA assumed a first year incremental per-engine cost of $100
for all categories of heavy-duty diesel vehicles above those established in Chapter 5 (and
summarized in Table 7-5). Table 7-11 contains the resulting discounted per-vehicle cost-
effectiveness numbers assuming the higher technology costs.
136
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Chapter 7: Cost-Effectiveness
Table 7-10
Cost-Effectiveness for All Heavy-Duty Diesel Vehicles
Assuming Increased Oil Capacity on 25 Percent of Vehicles
Model
Year
Grouping
Total
NPV
Costs per
Vehicle
Discounted
Lifetime Reduction
(tons)
Discounted Per-Vehicle
Cost-Effectiveness
($/ton)
NOx
NMHC
Nationwide
Scenario
Regional
Strategy
Scenario
2004-05
$441
1.377
0.019
$300
$400
2006-08
$398
$300
$300
2009+
$221
$200
$200
30 Year
Fleet
—
—
—
$200
$200
Table 7-11
Cost-Effectiveness for All Heavy-Duty Diesel Vehicles
Assuming Incrementally Higher Technology Costs
Model
Year
Grouping
Total
NPV
Costs per
Vehicle
Discounted
Lifetime Reduction
(tons)
Discounted Per-Vehicle
Cost-Effectiveness
($/ton)
NOx
NMHC
Nationwide
Scenario
Regional
Strategy
Scenario
2004-05
$522
1.377
0.019
$400
$400
2006-08
$459
$300
$400
2009+
$266
$200
$200
30 Year
Fleet
—
—
—
$200
$300
137
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Final Regulatory Impact Analysis
Comparing the 30 year fleet cost-effectiveness results in Table 7-11 with those presented in
Table 7-5, it can be seen that higher technology costs leads to slightly higher cost-effectiveness
results.
III. Comparison of Cost-Effectiveness with Other NOx Control Strategies
In an effort to evaluate the cost-effectiveness of the new standards, EPA has summarized the
cost-effectiveness results for two other recent EPA mobile source rulemakings that required
reductions in NOx emissions, the primary focus of the new standards. Table 7-12 summarizes the
cost-effectiveness results from the heavy-duty vehicle portion of the Clean Fuel Fleet Vehicle
Program and Phase II of the Reformulated Gasoline Program.
Table 7-12
Summary of Cost-Effectiveness Results for Recent EPA Programs
EPA Final Rule
Pollutants Considered
in Calculations
Cost-Effectiveness
($/ton)
Clean Fuel Fleet Vehicle Program
(Heavy-duty)
NOx
$1,300-1,500
Reformulated Gasoline—Phase II
NOx
$5,000
A comparison of the cost-effectiveness numbers in Table 7-12 with the cost-effectiveness
results presented throughout this chapter shows that the cost-effectiveness of the new engine
standards are more favorable than the cost-effectiveness of these recent EPA mobile source programs
that addressed NOx emissions.
138
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Chapter 7: Cost-Effectiveness
Chapter 7 References
5. "Benefits of Reducing Mobile Source.NOx Emissions," prepared by ICF Incorporated for
Office of Mobile Sources. U.S. EPA, Draft Final, September 30, 1996.
139
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Appendix to the Regulatory Impact Analysis
Tabie A-l contains the year by year fleetwide costs and NOx emission reductions
associated with the new engine standards for the twenty year period from 2004 to 2023. (The
numbers presented in Table A-l are no! discounted.)
Table A-l
Costs and NOx Benefits of the New HDDE Standard
Calendar Year
Fleetwide Costs
Fleetwide NOx Reductions
(tons)
2004
5241,500,000
53,000
2005
$246,000,000
106,000
2006
$216,300,000
188,400
2007
$219,900,000
270,800
2008
$223,300,000
353,200
2009
$122,600,000
435,600
2010
$125,600,000
518,000
2011
$128,500,000
580,800
2012
$131,400,000
643,600
2013
$134,000,000
706,400
2014
$163,100,000
769,200
2015
$166,000,000
832,000
2016
$169,000,000
878,800
2017
$171,900,000
925,600
2018
5174,700,000
972,400
2019
$177,600,000
1,019,200
2020
5180,400,000
1,066,000
2021
$183,200,000
1,112,800
2022
$186,000,000
1,159,600
2023
$188,800,000
1,206,400
Table A-2 contains the discounted year by year fleetwide costs and NOx emission
reductions associated with the new engine standards for the twenty year period from 2004 to
2023 . The year by year results were discounted to 2004 and a discount rate of seven percent was
assumed for the analysis.
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Table A-2
Discounted Costs and NO;< 3enefits of the New HDDE Standard
Calendar Year
Discounted
Fleetwide Costs
Discounted Fleetwide
N'Ox Reductions (tons)
2004
S241,500.000
53,000
2005
$229,900,000
99,100
2006
$188,900,000
164,600
2007
$179,500,000
221,100
2008
$170,400,000
269,500
2009
$87,400,000
310,600
2010
$83,700,000
345,200
2011
$80,000,000
361,700
2012
$76,500,000
374,600
2013
$72,900,000
384,200
2014
$82,900,000
391,000
2015
$78,900,000
395,300
2016
$75,100,000
390,200
2017
$71,300,000
384,100
2018
$67,800,000
377,100
2019
$64,400,000
369,400
2020
$61,100,000
361,100
2021
$58,000,000
352,300
2022
$55,000,000
343,100
2023
$52,200,000
333,600
Summing the discounted annual costs and discounted NOx reductions over the 20 year
period yields a 20-year fleetwide cost of $2.1 billion and a 20-year NOx reduction of 6.3 million
tons. The resulting 20-year annualized fleetwide costs and NOx reductions are SI96 million per
year and 593,000 tons per year, respectively. The complete analysis of the 20-year' costs and
emission benefits of the new standards has been included in the memo to the docket describing
the cost-effectiveness analysis of the new standards.
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